Compiled 09/14/11 6:00 AM (CT) Statistics: London Gold Fix $1,829.00 +$23.00 LME Copper Stocks 466,775 tons +775 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) While the gold market managed to climb back toward the prior session's highs in the overnight action, the market continues to give off the impression of being range bound. A slightly higher dollar could be holding back gold prices today and it is also possible that ongoing choppy action in the equity markets is keeping gold partially off balance because of the lingering fear of margin related selling. In looking forward, the US will produce several potential market moving economic readings today, with the most significant data probably coming from retail sales. However, a portion of the gold trade is tracking positively with the equity markets right now and that in turn tamps down the flight to quality focus in gold. In other words, the gold bulls probably want to see positive retail sales figures and less macro economic uncertainty, as that could reduce the fear of margin related selling of gold. The market will also see a US PPI release and from initial expectations there doesn't look to be a big reaction to the US inflation data, which is expected to be minimally higher. Some traders expect a potential ripple impact from the US 30 Year Treasury auction at mid session as demand this week for Treasury supply has been soft and interest in longer maturities has recently been weaker than demand for shorter maturities. Surprisingly gold appears to have found only minimal support from news of a downgrade of a couple key French banks and that suggests gold is still taking its direction from the equity markets. Comex Gold Stocks were 11.402 million ounces down 157,478 ounces. Comex Gold stocks are at the lowest in the past 10 readings. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally higher this morning. Early indications are that US equity markets will open with moderate losses later on today. The US Dollar is stronger against most of the major currencies this morning. The head of the European Commission stated his organization would offer proposals for the introduction of Euro Bonds. Two of the largest French banks were downgraded by a major credit rating agency this morning. UK Unemployment during July was 7.9%, in-line with expectations. Euro zone Industrial Production during July was up 1.0%, lower than forecasts. Major US economic numbers to be released this morning include the August Producer Price Index and August Retail Sales at 7:30 AM, July Business Inventories at 9:00 AM, and a private survey of mortgage applications released before the opening. The final leg of the Treasury's refunding, the 30-Year Bond auction, will have results announced at 12:00 PM.
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