Compiled 12/16/11 6:00 AM (CT) Statistics: London Gold Fix $1,589.50 -$.50 LME Copper Stocks 381,250 tons -825 tons Shanghai Deliverable stocks were 79,570 tons +6,858 GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market could have been undermined this morning by comments from the IMF head who suggested that the EU crisis was escalating and that without outside help the EU troubles could prompt a global recession similar to the 1930's. However, the markets haven't initially taken those warnings as a sign of more trouble for the Euro zone and that is somewhat surprising. On the other hand, it is possible that outside help is being orchestrated, as evidenced by Russian promises earlier this week of a possible capital infusion into the IMF. Other countries potentially lining up to support the IMF are Sweden and the Netherlands. The gold market might also be garnering some support from the recovery in Asian equity markets, which recently have been down for the count. With the only scheduled US data point today coming in the form of the US CPI report, it is possible that the macro economic outlook toward the US won't be markedly changed, as a result of today's data. After the very sharp slide in gold prices this week, it is possible that a measure of short covering buying might be seen, especially if the gold trade thinks that bear conditions are being temporarily reversed. In fact, positive Asian equity market action and some up beat analyst commentary toward gold overnight would seem to contribute further to the initial bullish tilt today. However, given the injury to bullish sentiment earlier this week, the gold bulls might need to see very positive US equity market action sustained and perhaps even extended and they might also need to see even more supportive action from the currency markets. Comex Gold Stocks were 11.336 million ounces up 39,671 ounces. Stocks have declined in 11 of the last 20 days. Comex Gold stocks are at their highest levels in the past 10 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Equity markets in Asia were higher today after a string of losses recently. Stocks in Europe also showed some minor strength to start the Friday trade. Early indications are that the US markets will open with modest gains later on today. The US Dollar was slightly weaker against most of the major currencies to start this morning. In the overnight action, the markets saw signs that large Japanese banks performance was holding together and that the Euro zone was able to post a trade surplus for October. The German upper house also reportedly passed its 2012 budget. Major US economic data to be released this morning is limited to the monthly CPI report, which is expected to show a minimal gain, or an unchanged reading. The market will also see commentary from the Chicago Fed President, the Dallas Fed President and the New York Fed President later today.
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