Compiled 08/24/11 6:00 AM (CT) Statistics: London Gold Fix $1,850.00 -$36.00 LME Copper Stocks 463,925 tons -1,250 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) While gold was thrust into a profit taking correction yesterday in the wake of a risk on move in the equity markets, some of that negative sentiment has been reversed overnight in the wake of a Japanese downgrade from a major ratings agency. Some gold bulls were a little disappointed that gold was undermined in the face of quantitative easing talk yesterday, and that could suggest the gold market thinks that economic uncertainty is currently more important than the prospect of inflation off further Fed action. The market didn't seem to embrace talk yesterday that some troubled Euro zone central banks should sell gold, rather than take on additional debt, but that story could have contributed to the profit taking slide yesterday. The market is seeing bearish gold price correction predictions from several analysts again overnight, with some arguing the long side is too crowded and others suggesting that a lack of QE promises from the Fed at the end of this week will be responsible for a temporary setback in gold prices. With a bullish gold article in a major US business publication this morning the bears might have a point that the long side of gold is crowded. In the short term, economic data from the Euro zone remained weak and that could keep Euro zone debt fears in place and in turn that issue could provide some residual support to gold prices. However, the US durable goods report this morning might be very important to gold, as a positive reading could tamp down uncertainty and in turn reduce the prospect of fresh easing from the US Fed later this week. Comex Gold Stocks were 11.580 million ounces up 5,000 ounces. Stocks have declined 11 of the last 20 days. Comex Gold stocks are at their highest levels in the past 10. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were generally lower during overnight trading, stock indices in Europe have posted gains this morning. Early indications are that US equity markets will open with moderate losses later on today. The US Dollar is currently weaker against most of the major currencies this morning. Libyan leader Muammar Gaddafi has abandoned his headquarters in the capital city of Tripoli. A major credit ratings agency has lowered their rating for Japanese sovereign debt, due to high levels of debt and an uncertain political situation. A private survey of German business sentiment during August was 108.7, weaker than expected. Euro zone Industrial Production during June was down 0.7%, lower than projections. The second leg of the Treasury refunding, the 5-year Note auction, will have results announced at 12:00 PM. Major US economic numbers to be released this morning are July Durable Goods at 7:30 AM, and a private survey of mortgage applications released before the opening.
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