Compiled 02/15/12 6:00 AM (CT) Statistics: London Gold Fix $1,725.50 +$4.50 LME Copper Stocks 313,050 tons -750 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) From the overnight action it would seem like gold and other physical commodity markets are seeing an improved environment, as there is a measure of confidence in sentiment toward the Euro zone. Unfortunately most of that improved sentiment would seem to be the result of assurances of debt related support from the Chinese. Some traders are also suggesting that upbeat French numbers, countervailed some of the Euro zone slowing evidence and that in turn suggests some players are looking ahead, instead of backward. News from the BOE that more quantitative easing might be needed is another element that might be providing gold with an initial positive lift. However, the gold bulls would seem to need something positive from US scheduled data flow later this morning, as the disappointment from the US retail sales figures yesterday clearly contributed to the weakness in gold prices yesterday morning. Expectations are calling for minor improvements in the US data, with the Empire State Manufacturing survey and the Industrial Production readings more than likely setting the tone of the day. Gold continues to see private analyst predictions of lofty gold prices, in the event of a total breakdown of the Euro zone, but in the near term gold appears to be tracking physical commodity market fundamentals instead of safe haven issues. On the other hand, with AngloGold overnight pegging gold prices to average only $1,700 to $1,850 an ounce this year, that could be viewed by some gold bulls as that upside targeting isn't markedly above the recent highs. In the short term, gold looks to track tightly with the US equity market and to a lesser degree, with the Euro currency. Comex Gold Stocks were 11.435 million ounces up 2,507 ounces. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian equity markets were higher overnight and that might have been partly the result of suggestions from the PBOC that they would continue to support the Euro zone by investing in debt in that region. European equity markets were also higher because of slightly up beat financial sector action and also because of the assurances from China. Early US stock market action was initially stronger. While the market saw somewhat soft GDP readings from portions of the Euro zone overnight, the trade seemed to focus in on the fact that the French economy clawed out some minimal growth. The markets also saw talk from the BOE that more QE might be necessary and that might be contributing to the partial risk-on vibe in the marketplace thins morning. In looking forward to the US trade, there will be continued testimony on the 2013 Budget and some Fed speeches, but the trade will also be presented with a very active scheduled report slate, with the most important reports being the Empire State Manufacturing survey and the Industrial Production/Capacity Utilization figures. Initial expectations call for modest improvement in most of the scheduled US numbers this morning.
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