Compiled 07/13/12 6:00 AM (CT) Statistics: London Gold Fix $1,579.00 +$13.50 LME Copper Stocks 251,675 tons +300 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Perhaps the gold market was short term overbought around the prior session's lows and perhaps global macro economic sentiment was too negative into this week's lows. Portions of the marketplace apparently anticipated definitively weak Chinese economic data overnight and there was also a temporary ripple of anxiety off the latest Moody's downgrade warning for Italy and that could have set most physical commodity markets on a negative track today. However, with a downtick in Italian debt yields and a surprise up tick in UK Construction figures, the trade has seen at least an initial positive track of dialogue into the US Friday morning trade action. Therefore gold does seem to be getting an initial lift from risk-on type sentiment, especially with US equities higher and the Euro managing to post some modest gains. While the Chinese GDP readings showed some of the slowest growth since early 2009, the trade saw an increase in some domestic consumption readings and a noted jump in fiscal spending, which could be a sign that the Chinese government is now starting to take more definitive action behind the scenes. With US PPI figures the key release of the trading US session today, it is possible that some of the risk-on vibe might be removed but only if those readings post a noted contraction. Comex Gold Stocks were unchanged at 10.811 million ounces and Comex Gold Stocks continue to hold at the lowest levels since 09/20/2010. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While Hong Kong shares managed a slight rise today, that market for the week was down sharply. Apparently the markets saw the Chinese growth figures to be as expected and not much worse than expected and that seemed to provide European equity markets with a modest early lift. An item that might point to increased support for the Chinese economy, might have been seen in other data Chinese released overnight, which showed government fiscal spending in June jumping by nearly 18% over year ago levels. An Italian debt auction overnight of 3 Year debt instruments showed a yield decline from the June levels and that news also contributed to a slightly upbeat global vibe this morning. Part of the benefit from the reduced Italian debt yield results overnight was countervailed by a Moody's warning of a potential downgrade of Italian debt ratings, if Italian access to debt markets becomes restricted. However, a surprise jump in UK Construction Output for May overnight seemed to provide the markets with just enough added optimism to shift the markets into a risk-on condition. On the other hand, US PPI figures are likely to contract this morning and the trade is also anticipating a minimal drop in the Michigan Consumer sentiment results. While there will be a Fed speech from Lockhart this afternoon, the markets aren't expecting to see any fresh revelations on Fed policy today.
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