Compiled 08/28/12 6:00 AM (CT)

Statistics: London Gold Fix $1,663.50 -$3.00 LME Copper Stocks 234,200 tons -1,350 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) December gold prices started out under noted pressure overnight, but were able to reject the brunt of the downside thrust. With the Euro higher, it wouldn't seem like residual concerns toward the EU were behind the range down washout in gold prices overnight. Perhaps ongoing fears of a hard landing in China were behind the initial weakness but gold prices seemed to sag after Asia had established a marginally weaker pattern. Perhaps gold was undermined by news that a key EU leader wasn't planning to attend the US Fed symposium later this week.

Given the weakness overnight, gold might need to see something positive from the US scheduled report front just to keep a risk off attitude from settling into the metals complex. Some gold traders are hopeful that the Fed will provide a measure of macro economic confidence later this week, while others think that the gold trade is currently in need of more evidence of progress in handling the EU sovereign debt crisis before buyers will find renewed buying interest in gold.

Some economists think that the private home price report from the US today will show another marginal gain and general expectations call for a minor rise in US Consumer Confidence readings and that news could provide gold with a lift off ideas that the US economy is holding together. However, positive economic news could also undermine gold if the trade decides to down grade US easing prospects as a result of today's news.

Comex Gold Stocks were 11.046 million ounces up 196,989 ounces. Stocks have declined 12 of the last 20 days.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Chinese equity markets were mixed overnight with shares attempting to rebound on extremely low trading volume. In fact, Shanghai shares reached the lowest levels in 3 1/2 years before recovering and that suggests the fear of a hard landing was revisited Chinese investors once again.

European stocks were slightly weaker this morning off lingering concerns of slowing in Spain, but shares were being underpinned by hope of something supportive from the Fed symposium later this week.

US shares continued to outperform the rest of the world, as investors have been spurred on by a surprise increase in merger and acquisition moves.

The US economic report slate today is fairly active, with a private home price survey release, Consumer confidence and a Richmond Fed Manufacturing Survey.

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