Compiled 05/18/12 6:00 AM (CT) Statistics: London Gold Fix $1,588.00 $+41.00 LME Copper Stocks 221,175 tons +3,725 tons. GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Most gold traders think that gold was lifted sharply yesterday because of fresh assumptions of quantitative easing from the US, while others think the bounce was simply a technical balancing move. Given the magnitude of the rally and the slight upside extension again this morning, the argument that the recovery is technical in nature seems to be full of holes. Some traders are suggesting that gold saw some buying yesterday off a shift in its flight to quality status, as they think the Euro zone crisis might have entered a new and very serious stage and that in turn might be funneling some fresh safe haven buying into gold. Some economists think that the hang over impact from surging turmoil in the Euro zone is likely to prompt the US Fed to act, even though the Fed would probably prefer to wait for even more evidence of US slowing before acting. In the near term, adverse currency market action is likely to serve as a slight drag on gold prices, but given that June gold to the lows this week, was down $233 an ounce from the February highs, it is possible that some value hunting buyers are starting to discount the threat of global slowing and deflation and instead are starting to anticipate some forceful action from one or several key central banks. Comex Gold Stocks were 11.001 million ounces up 1,168 ounces. Gold stocks have increased 11 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) China shares overnight were mostly weaker with the focus of the anxiety mainly on the threat of debt problems in Spain and Italy. European equity markets were also weaker to start today, with many measures in that region poised to forge the biggest weekly loss in 6 months. A downgrade of Spanish Banks by Moody's and a two notch credit rating downgrade of Greece by Fitch wasn't that surprising, but that action seems to have rekindled speculation of a breakup of the Euro zone again. While US equities were at times trading in positive ground early this morning, an empty US scheduled report slate might leave the market's focus on Europe and the Facebook IPO.