Compiled 02/09/12 6:00 AM (CT) Statistics: London Gold Fix $1,733.00 -$10.00 LME Copper Stocks 313,600 tons -2,750 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) As in a number of physical commodity markets, the gold market continues to see its direction tied to the ebb and flow of the Greece situation. Surprisingly, the April gold contract has shown some positive early action and that action is a little surprising, considering the weakness in equities and the news that the Greek negotiations have hit a specific snag. Some traders suggest that gold has been anticipating a deal and that Greece will ultimately have to accept terms, but clearly the gold trade remains concerned because gold prices this morning sit roughly $31 an ounce below last week's highs. Perhaps the initial gains in gold prices this morning were the result of news that South African posted another decline in gold production, as that key producer reported December gold output declined by 8.2% on a year over year basis. Some traders think the Chinese inflation news is a negative to gold, as the lack of a definitive move back into an easing posture by China, could leave headwinds in the face of the global economy. While the gold market might react to US scheduled economic data flows this morning, those readings might only be temporary influences as the focus of the trade will probably remain directly on Athens and that focus will likely shift to Brussels for the weekend. At mid session today, the US will auction some 30 Year bond supply and that result could have a negative impact on gold, especially if the Treasury trade shows signs of flight to quality buying, as that in turn would seem to argue against risk-on sentiment. Comex Gold Stocks were 11.431 million ounces down 96 ounces. Stocks have declined 11 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian equity markets were mixed overnight, with the resurgent Chinese inflation readings derailing hopes that the PBOC might shift away from tightening policies. European equity markets were also mixed with some gains seen off residual optimism toward the Greek situation, and that comes despite news that the parties were hung up on at least one issue (pension cuts). Early US stock market action was mixed to lower because of uncertainty off the EU situation. The overnight economic news flow showed a hotter than expected Chinese January inflation reading, with most of the heat coming from soaring food prices. In other economic developments, Japan showed some weakness in December core machinery orders, while UK December manufacturing output increased by 1%, which was slightly above estimates. The US economic report schedule today brings initial and ongoing claims, which are expected to show minor gains. Also out today from the US is a wholesale trade reading, which is also generally expected to rise. In the end, US data might have an impact, but the real focus of the trade is likely to remain on Greece.