Compiled 10/05/11 6:00 AM (CT) Statistics: London Gold Fix $1,600.00 -$72.00 LME Copper Stocks 474,925 tons -100 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market was clearly undermined over the last 24 hours by ideas that the Euro zone was potentially coming together with another plan to insulate the Union from a chain reaction failure of European banks. It also seemed as if comments from the US Fed's Bernanke served to yank the rug out from under the gold market yesterday, as the head of the Fed threatened or promised QE3 in the event it was needed to head off a US recession. In short, gold recently returned to a safe haven instrument status and the safe haven mentality seems to have been moderated slightly by a couple of events over the last 24 hours. However, protests against austerity have ratcheted up in Athens again this morning and some might take note that Germany doesn't appear to be a main participant in the latest European back stop plan. With December gold prices early this morning, already sitting as much as $79 an ounce below the prior session's high, it is clear that gold has lost some favor. However, it does seem as if the gold market has settled back into a flight to quality mode again and therefore the markets focus is likely to remain on all things European. The gold market could have seen some support overnight from a private prediction, that central banks were poised to purchase over 300 tons of gold this year, but the market isn't that interested in classic physical demand stories, it is focused instead on the ebb and flow of investment demand. The gold market also didn't seem to be that interested in a private gold price forecast of $2,000 an ounce that was released overnight. Comex Gold Stocks were unchanged at 11.211 million ounces. Stocks have declined 13 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally stronger this morning. Early indications are that US equity markets will open with slight gains later on today. The US Dollar is weaker against most of the major currencies this morning. There are reports that Franco-Belgian bank Dexia will be broken up, with toxic assets put into a bad bank that will have government support from both nations. A major credit ratings agency downgraded Italy's sovereign debt by three levels with a negative outlook. A private survey of German Service Industries during September was 49.7, lower than projections. A private survey of UK Service Industries during September was 52.9, much higher than expected. Euro zone GDP during the second quarter was up 1.6% year-on-year, slightly lower than forecasts. UK GDP during the second quarter was up 0.6% year-on-year, lower than expectations. Euro zone Retail Sales during August were down 0.3%, in-line with forecasts. Major US economic numbers to be released this morning, include a private survey of US Private Employment at 7:15 AM, a private survey of US non-Manufacturing industries at 9:00 AM, and a weekly private survey of mortgage applications released before the opening.
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