Compiled 11/28/11 6:00 AM (CT) Statistics: London Gold Fix $1,714.00 +$38.00 LME Copper Stocks 392,775 tons -1,925 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With an initial risk on vibe in place, precious metals and a host of physical commodities are starting off the week on a very positive track. In addition to sharp overnight gains in equities, noted strength in the Euro and calls for a wave of global stimulus, the bull camp in gold might be embracing a number of potentially bullish themes. However, the back bone of the bullish vibe today seems to be hope that the IMF might be poised to help Italy with as much as 600 billion Euros and that would certainly seem to be a large enough backstop to quell debt fears from Italy. With the reversal of last week's vulnerable stance in gold, it is also possible that gold is seeing some classic short covering buying interest this morning. With the rise this morning, December gold has reached up to the highest level since November 21st and that might be the result of a measure of short covering. However, given the action in equities and the broad based price gains being seen in a number of physical commodity markets this morning, there might also be some justification for fresh outright buying of gold. With the gains starting in Asia and the Asian trade pointing to hope for Italian debt relief, commentary from the IMF might be critical for gold this week. It is also possible that part of gold's gains today are the result of OECD calls for global stimulus, as several countries including the Euro zone, might be poised to reduce rates in an effort to cushion the world economy against Euro zone affairs. Others have even suggested that the US and UK need to launch additional QE measures as austerity in the UK and forced spending cuts in the US are expected to be a check on future growth rates. Some gold players might be buying gold off hopes that this Friday's US Non Farm payroll reading will contribute to the risk on view. News that a major gold producer saw some reduced output probably isn't contributing significantly to the bullish vibe this morning. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Europe were generally higher during overnight trading, early indications are that US equity markets will open with substantial gains later on this morning. The US Dollar is sharply lower against most of the major currencies this morning. An Italian newspaper is reporting that Italy may receive a 600 billion Euro loan from the IMF if their debt problems get worse, although the IMF later denied that report. Belgium has passed a new austerity budget and may be closing in on forming a new government. A major credit rating agency warned that the current debt crisis could threaten the sovereign debt ratings of all Euro zone nations. The only major US economic number to be released this morning will be October New Home Sales at 9:00 AM.
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