Morning Gold Market Report 8/22

   on August 22 2012 10:17 AM

Compiled 08/22/12 6:00 AM (CT) Statistics: London Gold Fix $1,640.50 +$16.50 LME Copper Stocks 234,175 tons -325 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) While optimism toward the EU debt situation has waned slightly in many markets, gold seems to have maintained a generally positive track to start today. Perhaps because of hopes that today's FOMC meeting minutes will serve to keep hope of additional US easing alive. Gold was possibly drafting support from comments from the head of the PBOC, who suggested that the central bank will need to use all available tools to stimulate the Chinese economy. Unfortunately for the bull camp, the gold bulls had to overcome patently negative economic news from Japan overnight, in the form of a much stronger than expected decline in exports within the Japanese import/export report. However, gold might have been able to retain its bullish track in prices overnight, because of suggestions from S&P that the Chinese central bank retained significant capacity to foster economic growth. In addition to another fresh new high for the move and a rise above the early June high, December gold is approaching longer term moving averages this morning and that could provide the market with some technically related buying interest. Another story line that could be providing residual support to gold today is talk of ongoing central bank buying of gold. It is also possible that reports of labor problems at BHP, might lend some spillover support to gold, but to start today, outside market action isn't as definitively supportive as it was in the first two trading days of this week. In fact, weaker global stocks and adverse currency market action has probably tempered some of the bullish views toward gold prices this morning. Perhaps gold will benefit from the US existing home sales figures but it is unclear whether the release of the FOMC meeting minutes will be supportive of gold. Comex Gold Stocks were 10.844 million ounces down 261 ounces. Gold stocks have declined in 13 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese stocks were weaker overnight, as fears of further slowing were front and center after the head of the PBOC suggested that China would need all the tools available to stimulate the Chinese economy. With Japanese exports down sharply overnight and Japanese exports to China down by double digits in July, the increased liquidity effort news from the prior trading session in China seems to have been partially discounted. French and German shares were weaker overnight, as the Japanese export data rekindled European slowing fears again. It also seems as if hope, optimism and progress in solving the Euro zone debt debacle have at least temporarily stalled again. The US scheduled report slate is rather thin again today with existing home sales from NAR the only scheduled US report due out. Expectations call for a slight increase in the home sales figures for July. During the session today, the market will see a Fed Speech from Charles Evans late today and the release of the FOMC meeting minutes in the early afternoon action.

Join the Discussion