Compiled 12/29/11 6:00 AM (CT) Statistics: London Gold Fix $1,537.50 -$46.50 LME Copper Stocks 371,300 tons -1,225 GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The bull camp might have hoped to see gold prices check up, in the wake of Italian debt auction results this morning that were judged to be just low enough to tamp down Euro zone debt fears. However, the bear camp might suggest that the yields on the longer term Italian instruments remained close enough to unsustainable levels, to keep fear in place. Apparently the currency markets also saw the auction results to be lacking, as the Euro was softer against the dollar while the Canadian and Yen were showing signs of a risk off mentality. With February gold falling through a series of potentially critical chart support points overnight and for most of this week, it is likely that gold is seeing both capital and margin related liquidation. In the current environment, news of higher Russian gold and currency reserves is probably discounted and it is also likely that a sweep of decent US scheduled data points later this morning might not be capable of shifting sentiment around in the gold market. In fact, it could take better than expected US numbers and a noted turn up in US equities just to save the gold market from ongoing selling pressure ahead. Some traders even think that action in the gold/silver ratio will be discounted, as the interest in all precious metals markets continues to deteriorate. Comex Gold Stocks were 11.397 million ounces up 117,948 ounces. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Equity markets in Asia were lower overnight, with European stocks initially opening higher but mostly marking time ahead of the Italian debt auction results. The US equity markets also showed initial positive action but the trade wasn't giving off a definitive direction. The longer term Italian debt auction went off with yields coming in just below the supposedly unsustainable 7% level. In other developments overnight, Greek inflation was down from the prior readings, but was still at levels that might be considered unsustainable by some. The US Dollar was marginally stronger against most of the major currencies, which was somewhat surprising considering the acceptable Italian auction results. The scheduled data flow from the US today includes initial and ongoing claims, pending homes sales and a couple US regional economic reports.
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