Statistics: London Gold Fix $1,580.00 +$.50 LME Copper Stocks 252,550 tons -1,025 tons
GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market has started out on a positive footing today but prices were initially unable to climb above the prior session's high. At least to start, Asian sentiment was up beat off the prospect that the world's largest economy (the US) might be seeing signs of a minor recovery in its housing sector and it also seems like there has been some positive sentiment derived from generally favorable US corporate earnings news. Limiting gold on the upside today, is talk that the Chinese economy remains weak enough to stem demand for high end purchases.
It also seems as if gold and other physical commodities are suffering from waning easing prospects from the US Fed but that is at least partially offset by fresh talk of Chinese easing action over the coming weekend. In looking forward today, the gold market will be presented with a rather important sweep of data from US initial and ongoing claims figures, as initial claims last week forged a noted downside breakout. Therefore the trade today will be looking to see if the one week lagged ongoing claims figures, confirm the improvement in the US jobs market that was seen last week in initial claims.
While gold showed some disappointment in the wake of the recent Fed testimony, it was clear yesterday that gold was temporarily pressured in the direct aftermath of stronger than expected US housing starts data and that in turn could mean gold prices might come under pressure again today, if the claims figures denote favorable US jobs action again, as that in turn probably lowers the odds of additive QE from the US. However, there will also be an existing home sales report today and that report could negatively impact gold, especially with expectations calling for another positive result from the US housing sector. In short, the prospect of easing continues to be a driving force in the gold market.
Comex Gold Stocks were 10.811 million ounces up 11,370 ounces. Gold stocks have declined 12 of the last 20 days.
OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) China shares were stronger overnight, with Hong Kong shares managing to breakout to a fresh two week high. Apparently investors in China were cheered by favorable US housing data yesterday and also from mostly positive corporate earnings news flow from the US Wednesday. European shares were also higher to start today but rising Spanish yields in the wake of a shorter term auction overnight, did seem to dent optimism in the Euro zone. Apparently the world saw the bigger than expected jump in US housing starts yesterday as a positive development, but it is possible that increased talk and focus on the fiscal cliff ahead will serve the temper the quasi risk-on vibe in place at the start of the Thursday US trade.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.