Compiled 02/14/12 6:00 AM (CT) Statistics: London Gold Fix $1,721.00 -$6.00 LME Copper Stocks 313,800 tons +300 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) In the overnight action the gold market was under some initial pressure because of adverse currency market action and potentially because of the Moody's downgrades and warnings. However, the negative track toward the Euro zone was moderated somewhat by favorable Italian debt auction results and the up beat German ZEW dialogue. On the other hand, the bull camp in gold probably needs something supportive from the US retail sales report this morning to attempt to shift sentiment back toward a risk-on tilt. While the gold market saw the launch of a new gold ETF instrument in Asia overnight, demand for that issue was a little softer than expected. The gold market might be expected to take some direction from the action in US equities today, which in turn seem to be banking on something positive from the retail sales report. Initial estimates from the US retail sales report center on a gain of +0.7 to +0.8 and the failure to register something at or above those levels, could embolden the bear camp. News that the US Administration was looking to apply royalties to gold, silver and copper production might be partially limiting to gold, as the US is already seen as a higher cost producer on a global basis. Another issue that could serve to undermine gold prices in the short term, is ongoing fear that European central banks might be forced to sell gold to shore up their finances. Not surprisingly, the most salient threat of central bank sales would seem to be centered on Greece. All things considered, the bears have the initial edge, but the bull camp is hopeful that positive US numbers will be able to alter the overnight bearish track in gold prices. Comex Gold Stocks were 11.432 million ounces up 1,929 ounces. Stocks have declined 11 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian equity markets were mixed overnight but the Nikkei managed to forge a surprise recovery in the wake of additional Japanese government support. European equity markets were also mixed, but the markets initially saw pressure off the credit ratings news flow from Moody's. Early US stock market action was initially weaker, but the markets seemed to claw back into positive ground in the wake of positive results from an Italian debt auction. The markets also saw some positive results from a German ZEW survey and that news was given added importance by suggestions from the ZEW, that recent slowing in the German economy was probably temporary. In the US trade today, the markets will be presented with a US retail sales report, with expectations calling for a modest expansion. The US will also release a private small business index survey, Manufacturing Inventories as well as Import & Export prices. There will also be two Fed speeches and US Treasury Secretary testimony to a Senate committee on the recently released 2013 US Budget.