Compiled 10/03/11 6:00 AM (CT) Statistics: London Gold Fix $1,660.00 +$31.00 LME Copper Stocks 474,950 tons +1,250 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With equities generally lower, the dollar higher and gold prices seeing a strong early bid to start the new month and quarter, one gets the sense that gold might have shifted back into a flight to quality mode again. The ultimate test of the focus of the gold trade will be the gold markets reaction to scheduled US data later this morning. However, some traders think that gold could be set to get enough lift off the ongoing fear of a Greece breakdown and that US scheduled data might be simply discounted. On the other hand, estimates for the US ISM readings aren't expecting a definitively strong ISM manufacturing result this morning and that could leave the focus of the trade in the gold market on international events. Overnight the press reported higher Indian gold price action, but the trade supposedly saw some physical buyers balk at the higher gold price level. A strong Indian currency should deflect some of the higher flat price of gold to Indian buyers, but the ebb and flow of European debt problems looks to garner the most attention going forward. Despite seeing a reduction in net longs held by the Non Commercial and non reportable camps in the most recent positioning reports, the gold market has managed some gains this morning and for some bulls that might be a noted signal of a possible return to a classically bullish environment. The Commitments of Traders Futures and Options report as of September 27th for Gold showed Non-Commercial traders were net long 158,754 contracts, a decrease of 44,278 contracts. The Commercial traders were net short 199,751 contracts, a decrease of 52,037 contracts. The Non-reportable traders were net long 40,998 contracts, a decrease of 7,757 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 199,752 contracts. This represents a decrease of 52,035 contracts in the net long position held by these traders. Comex Gold Stocks were 11.223 million ounces down 42,906 ounces. Stocks have declined 12 of the last 20 days. Comex Gold stocks are at the lowest in the past 10 readings. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Equity markets in Asia and Europe were weaker during overnight trading. Early indications are that US equity markets will open with moderate losses later on today. The US Dollar was stronger against most of the major currencies this morning but posting a loss versus the Yen. Greece passed a new austerity budget this morning, which was unable to reach their deficit targets. The official Chinese PMI index during September was 51.2, slightly below expectations but well above the critical 50 level. The Bank of Japan's Tankan survey of Japanese economic conditions during the third quarter of 2011 was plus 2, in-line with expectations and a move back into positive territory. A private survey of German manufacturing during September was 50.3, higher than market expectations. A private survey of UK manufacturing during September was 51.1, was higher than market forecasts. Major US economic numbers to be released this morning include August Construction Spending as well as a private survey of US manufacturing at 9:00 AM. In addition, Fed Regional President Lacker will give a speech after the session.