Compiled 08/27/12 6:00 AM (CT)

Statistics: London Gold Fix $1,666.50 N.A. LME Copper Stocks 235,550 tons N.A. tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Initially gold prices were able to carve out a fresh new high for the move overnight, but the trade wasn't able to maintain that initial push higher on the charts. Clearly fears of global slowing were afoot again overnight, with significant weakness seen in Chinese equities being seen as a sign of impatience by investors. In other words, Asian investors were disappointed that the Chinese leader failed to provide fresh hints of assistance for the Chinese economy.

Apparently the gold trade started off anticipating fresh easing from the US Fed overnight but the Asian trade was eventually distracted away from that line of thinking. With last week's news highlighting a letter from the US Fed Chairman to a Congressman promising more action for the US economy, the trade might not see as much of a reaction from scheduled data unless the data comes in much stronger than expectations. In other words, gold prices, with the gains of the last two weeks have largely factored in some action from the Fed in their September meeting and the gold trade might need a fresh focus.

News of a resumption of investment interest in some gold derivative instruments at the end of last week, highlights the widespread expectation of additional global assistance for the slumping economy. With a stronger Euro, rising soybean and energy prices, the outside market forces today look to be supporting the bull camp in the early going.

Comex Gold Stocks were 10.849 million ounces up 4,470 ounces. Gold stocks have declined in 13 of the last 20 days.

The Commitments of Traders Futures and Options report as of August 21st for Gold showed Non-Commercial traders were net long 140,126 contracts, an increase of 21,903 contracts. The Commercial traders were net short 182,569 contracts, an increase of 32,122 contracts. The Non-reportable traders were net long 42,444 contracts, an increase of 10,220 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 182,570 contracts. This represents an increase of 32,123 contracts in the net long position held by these traders!

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Chinese stocks saw significant weakness overnight as the trade was disappointed in the lack of fresh easing hints from the Chinese Premier. European stocks were also softer off revived slowing fears and also because of comments from Bundesbank officials who were pointing out the potential pitfalls of European bond buying. With German Business Confidence also softening overnight, the trade enters the new trading week fearful that slowing could be poised to pull the German economy back toward recession.

In the US, the economic report slate today has a couple regional Fed manufacturing reports due out, with the Chicago Fed Manufacturing report potentially taking center stage.

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