Compiled 08/23/11 6:00 AM (CT) Statistics: London Gold Fix $1,886.50 +$8.75 LME Copper Stocks 465,175 tons -1,275 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market starts the Tuesday US trade out on a corrective track and that looks to be primarily the result of optimism in global equity markets. However, the overnight flow of economic information from the Euro zone could have easily inspired even more flight to quality buying of gold this morning as that data was patently weak and that could leave concern for the Euro zone in place down the road. Somewhat surprising is the fact that gold is also trading lower this morning in the wake of comments from a Chinese Vice foreign Minister overnight, who expressed concern about a possible collapse of the Euro zone. It is also somewhat surprising that gold has generally failed to benefit from the early action in the currency markets today, as the dollar looks poised to fall to the lowest levels since the early May lows. Some noted gold analysts are expressing concern that the long gold trade is becoming crowded, while others suggest there are so many historical uncertainties still in place that historic interest in gold will continue. The gold market might be partially undermined by comments from the Fed's Bullard overnight who indicated he wasn't in favor of QE3 right now and he also indicated that if the Fed were to decide to use QE3, that decision should be made on a meeting to meeting allotment, instead of being part of a sustained program. With gold recently batting around the idea of inflation from upcoming Fed easing, the flow of US scheduled numbers today could be important, as the gold bulls probably want to see some soft numbers released. Comex Gold Stocks were 11.575 million ounces down 129 ounces. Gold stocks have declined 11 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Euro were generally higher during overnight trading, early indications are that US equity markets will open with substantial gains later on today. The US Dollar is currently weaker against most of the major currencies this morning. While rebel forces have control of most areas in the Libyan capital of Tripoli, fighting continues between loyalist and opposition forces. A private survey of Chinese manufacturing during August was 49.3, higher than market expectations. A private survey of Euro zone manufacturing during August was 49.7, in-line with forecasts. A private survey of German economic sentiment during August was -37.6, much weaker than expectations. The first leg of the Treasury refunding, the 2-year Note auction, will have results announced at 12:00 PM. Major US economic numbers to be released this morning are July New Home Sales and the Richmond Fed manufacturing survey at 9:00 AM, and a private survey of store sales released during the session.
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