Compiled 07/25/11 6:00 AM (CT) Statistics: London Gold Fix $1,618.50 +$30.50 LME Copper Stocks 471,200 tons -1,125 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market overnight managed a fresh new high and the trade generally managed that run up off ideas that the US is moving closer to a default. Apparently a large portion of the market continues to think that the US will avoid a default and that the US credit rating won't suffer, but those views could come under increasing suspicion, as every day passes on the way to the August 2nd deadline. Suggestions from legislators, past Fed members and others that an unforeseen chain of events might go into motion, if a mechanical default is anticipated, has probably pulled in some of the buyers of gold this morning. News that investors overnight preferred German bunds to US Treasuries and weakness in the dollar, suggests that flight to quality interest is capable of rising sharply in gold. With weakness in a series of physical commodity markets this morning (copper and platinum) it is possible that gold prices are in some way being held back by the renewed fears of slowing in the event that US interest rates are somehow forced higher as a result of the failure to get a debt deal in place before the self imposed deadline. Comex Gold Stocks were 11.433 million ounces down 4,080 ounces. Gold stocks have declined 11 of the last 20 days. The Commitments of Traders Futures and Options report as of July 19th for Gold showed Non-Commercial traders were net long 263,063 contracts, an increase of 26,870 contracts. The Commercial traders were net short 308,043 contracts, an increase of 23,772 contracts. The Non-reportable traders were net long 44,980 contracts, a decrease of 3,098 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 308,043 contracts. This represents an increase of 23,772 contracts in the net long position held by these traders. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Europe are generally weaker during the overnight session, early indications are that US equity markets would open with sizable losses this morning. The US Dollar is slightly weaker against most of the major currencies this morning, but is posting substantial losses versus the Yen and Swiss Franc. Negotiators in Washington failed to come to any agreement over the weekend with raising the US debt ceiling. A major credit ratings agency has lowered their rating on Greek sovereign debt 3 levels, down to their second lowest level above default status. The only major US economic number to be released this morning will be the Chicago Fed National Activity index at 7:30 AM.