Compiled 01/17/12 6:00 AM (CT) Statistics: London Gold Fix $1,662.00 +$20.00 LME Copper Stocks 365,375 tons -1,525 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With a huge range up extension to start today, February gold has reached the highest level since December 13th. Not surprisingly, gold has at least partially tied its wagon to equities and to what appears to be a positive global macro economic vibe. Certainly gold saw the Chinese and German data overnight as supportive and more importantly that data seems to have put last week's European downgrades back on the back burner. While gold hasn't paid that much attention to physical supply side news lately, the market might draw some support from news overnight of another decline in South African gold production for the month of November. South African gold production in November reportedly declined by 4.5% versus the prior November tally but that news might be partially offset by Gold Fields Mineral Services prediction that world gold production in 2011 probably rose by 2%. However, with the gold market also seeing fresh predictions that China would overtake India early this year as the world's largest consumer of gold, it is possible that any negative supply side issues in gold will be mostly discounted. Some traders think a change in Indian gold and silver import duties might be seen as a negative, but with the strong initial pulse up in gold prices to start today it would appear that the negatives are being brushed aside. Comex Gold Stocks were 11.462 million ounces down 835 ounces. Stocks have declined 12 of the last 20 days. The Commitments of Traders Futures and Options report as of January 10th for Gold showed Non-Commercial traders were net long 139,435 contracts, an increase of 3,649 contracts. The Commercial traders were net short 174,408 contracts, an increase of 6,632 contracts. The Non-reportable traders were net long 34,972 contracts, an increase of 2,982 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 174,407 contracts. This represents an increase of 6,631 contracts in the net long position held by these traders. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Equity markets in Asia were higher overnight off Chinese data that seemed to clear the way for fresh easing but also suggested that the Chinese economy was still generally holding together. European equity markets were also higher early, as very favorable German ZEW readings and decent Spanish auction results provided the markets with enough optimism to countervail the European downgrades from S&P late last week. The US Dollar has started out weaker against the euro and the Greenback was also generally weaker against most of the actively traded currencies. In looking ahead, the US markets will see an Empire State Manufacturing reading this morning and expectations generally call for a minor rise in that report. In the end, the precious metals markets were seeing generally supportive action in equities and also from a long list of physical commodity markets.