Compiled 08/01/12 6:00 AM (CT) Statistics: London Gold Fix $1,614.75 -$8.00 LME Copper Stocks 248,625 tons -200 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Mostly favorable outside market action this morning has allowed gold to start out on a somewhat positive footing. Surprisingly the gold market wasn't undermined as a result of more evidence of broad based slowing in the Euro zone again overnight and that is clearly the result of hope that the ECB will move to cut rates and perhaps even hint at additional stimulus efforts in their Thursday central bank meeting. Gold was probably undermined slightly by news overnight of a slight decline in US Mint gold coin sales for July, especially since the July 2012 sales were half the sales levels seen last July. While some gold players are suggesting that gold will be able to stand up to an on-hold US Fed later today, it could be difficult for gold to avoid some temporary back and fill action, if the Fed only has supportive talk and no fresh policy action today. However, gold might be cushioned against an on-hold Fed because of the anticipated/promised action from the ECB on Thursday morning. While gold also saw evidence of a minor rise in gold production from Antofagasta in their 2nd quarter, the focus of the gold trade this morning is probably locked onto Central Bank prospects and outside market action from currencies and equities. Comex Gold Stocks were 10.807 million ounces down 32 ounces. Gold stocks have now declined in 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese Shares were higher overnight, with the Chinese PMI report barely holding above the growth/no growth reading of 50.0. European shares were also higher and that is a little surprising considering the sweep of soft scheduled data flows from the EU. In fact, weak Factory orders data clearly fostered increased concerns of entrenched slowing in the Euro zone but the proximity to the ECB meeting on Thursday morning probably served to keep sentiment on a slightly positive track. While the US report schedule will be active today with Construction Spending, ISM Manufacturing and an On-line help wanted release, the main focus of the trade is likely to be on the early afternoon statement from the US Fed. Trade sentiment on the US Fed result today, mostly centers on supportive dialogue that is expected to stop just short of a definitive move on policy.
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