Compiled 02/03/12 6:00 AM (CT) Statistics: London Gold Fix $1,759.50 +$12.00 LME Copper Stocks 326,100 tons -2,575 tons Shanghai Copper stocks +48,246 tons to 179,891 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market seems to have a positive tilt in the early action this morning and for some that would seem to suggest that gold traders are anticipating a generally supportive US payroll result. However, the gold market might be cushioned against some US macro economic disappointment, as the overnight global news flow and equity market action was mostly up beat. In fact, portions of the trade saw the Chinese PMI readings in a positive light and in turn that fostered some talk that China might be able to avoid a hard landing. The highlight of the positive number flow overnight was clearly the UK PMI reading, which seemed to spark some measure of risk-on sentiment. It also seemed as if European news flow last night was spun into a supportive track by many physical commodity markets, as the trade seemed to embrace marginal Euro zone and German PMI readings and in turn the trade seemed as if a decline in Euro zone retail sales was mostly unimportant. However, with gold prices managing to carve out a fresh new high for the week and in turn hitting the highest level on the charts since December 2nd the bull camp has to feel somewhat confident. Furthermore, news that Spanish debt yields have continued to fall overnight is another element that probably gives the gold bulls some confidence into the US scheduled numbers. Given the positive macro economic track in place from overnight, the gold bulls might be in a better position to weather a disappointing payroll reading today. The bear camp might suggest that US non farm payrolls need to be above the prior's month's gain of +200,000, just to keep fears of faltering macro economic momentum from surfacing in the headlines. However, it could be difficult to make anything above a +150,000 US monthly non farm payroll gain into a negative for gold today. Comex Gold Stocks were 11.524 million ounces up 30,743 ounces. Gold stocks have declined in 11 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian equity markets were mixed this morning, with Shanghai stocks rising despite somewhat soft Chinese PMI readings. However, the Nikkei and Australian equity markets were weaker. European equities were generally higher off positive UK services PMI data. In the early action today, US equities are showing minimal gains to start, but movement is probably being limited ahead of the monthly US non farm payroll report. In retrospect, overnight data was somewhat soft but yet markets in Asia and Europe seemed to spin the news into a positive. Perhaps the trade is looking ahead to the US Non farm-payroll results, which generally have a range of estimates of gains from just below 100,000 to as high as 190,000. In addition to US Non farm payrolls for January, the US will also see a factory orders release and the ISM Non Manufacturing release for January. Expectations for both Factory Orders and the ISM non manufacturing readings generally call for modest gains but those readings might be partially overshadowed by the residual impact from the payrolls.
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