Morning Gold Market Report

on June 08 2012 10:33 AM

Compiled 06/08/12 6:00 AM (CT) Statistics: London Gold Fix $1,576.00 -$44.75 LME Copper Stocks 229,675 tons +375 tons Shanghai copper stocks -14,623 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) At the overnight low, August gold had given up a large portion of the sharp run up forged since the end of last week. Not surprisingly gold, equities and a host of physical commodity markets were discouraged by the lack of definitive action from the US Fed Chairman yesterday. While gold could have benefited from a dovish Fed statement overnight from the Fed's Evans, the bull camp apparently isn't going to be easily revived. With global equities under pressure and the Greenback back in favor, it is not surprising to see a risk off environment back in place to start the last trading session of the week. More than likely, gold won't see much of a reaction to the US Trade Balance report. While there could be some headline flow from an American Bankers Association meeting and from a speech from the IMF Managing Director, the attention of the markets might be expected to remain focused on Spain until the European equity markets close. Unless some official statement from the EU alters sentiment, it would appear as if the bear camp is set to start with an edge today. Comex Gold Stocks were 11.008 million ounces up 800 ounces. Comex Gold stocks are at their highest levels in the past 10. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Chinese stocks were weaker again overnight, with some measures posting the biggest weekly losses in six months. Apparently investors and traders in China took the surprise Chinese rate cut as a sign that more negative economic news will be seen directly ahead. European equities were also weaker overnight, as the trade remains concerned over the situation in Spain, especially after a credit ratings change overnight. Rumors overnight are now suggesting that Spain will make a formal request this weekend for more funds. Early US equity market action is also weaker again, as trouble in the Euro zone, residual slowing fears from the US and a lack of definitive direction from the Fed this week has left investors unsettled. However, with another Fed member overnight suggesting that the US was in need of additional easing, a portion of the negative international economic vibe was tamped down. On the other hand, the US economic report slate today somewhat thin with Trade Balance and a wholesale trade figures due out. Therefore, the focus of the markets might remain on Spain and their potential weekend request for funds. The market might also see some reaction to McDonalds same store sales figures which will be released early this morning.

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