Compiled 08/19/11 6:00 AM (CT) Statistics: London Gold Fix $1,862.00 +$67.50 LME Copper Stocks 463,625 tons +650 Shanghai Deliverable stocks were 112,014 tons -8,805 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With ongoing steep losses in equity markets overnight, ongoing fears toward European bank funding capacities and a general lack of confidence, it is not surprising to see gold ramp up to even more new all time highs this morning. With the 24 hour London gold fix managing a rise of $67 an ounce, a historical condition is unfolding. Some gold players think that the US Fed and other central bankers are poised to move into an inflationary posture, in an effort to head off a global Japanese style deflationary spiral. However, many traders still think that gold prices have seen very little lift off classic inflationary vibes so far and that the majority of the rise in gold prices has been fueled by fear, anxiety and a rush to safety. With the press trumpeting the magnitude of losses in European bank shares recently and rumors of funding problems swirling for those entities, it might not be easy to lower the flight to quality buzz quickly. Like Treasuries, gold has to be considered somewhat technically overbought, but given the lack of alternative investments and instruments, one could make the argument that money has little alternative to gold. Gold might see some temporary weakness in the wake of Fed speeches today as the US central bankers are probably poised to attempt to calm nerves with their statements today. In the end, gold and stocks will probably be feeding off each other today, with particular sensitivity seen in the late afternoon action. Comex Gold Stocks were 11.451 million ounces down 18,880. Stocks have declined 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Europe are generally weaker during overnight trading, early indications are that US equity markets will open with substantial losses later on today. The US Dollar is currently near unchanged levels against most of the major currencies this morning. Austria and the Netherlands are following Finland's lead in seeking collateral for their bailout loans to Greece. German PPI during July was up 5.8% year-on-year, higher than market expectations. There are no major US economic numbers to be released this morning. However, Fed Regional Presidents Dudley and Pianalto will give speeches during the session.
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