Morning Gold Market Report 9/05

  on September 05 2012 10:24 AM

Compiled 09/05/12 6:00 AM (CT)

Statistics: London Gold Fix $1,689.50 -7.50 LME Copper Stocks 215,150 tons -3,750 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) More disappointing data out of the US yesterday is supportive to the precious metals as is raises the likelihood of Fed easing, but some weaker Euro PMI data overnight lent support to the dollar and seemed to undercut some of the gold market's strength. As the week moves on, the markets will be focused on the ECB meeting Thursday and the US monthly jobs data on Friday. There is some anticipation that ECB will move a step closer to resolution if ECB President Draghi gets a bond-buying plan underway, but the trade also seems to be viewing the jobs report as the "main event."

Gold made a big upside move after Bernanake's comments last Friday seemed to leave the door open to a quantitative easing move, and a poor report this Friday could spark another move up. However, at some point the market will need action as well as words.

Speculator interest in the market is growing, with open interest on the gold futures reaching their highest level since early March. Holdings of a major gold ETF rose 3.6 tonnes to 1291.1 yesterday, the highest since March 20th when they stood at 1293.3.

Comex Gold Stocks were 10.924 million ounces down 37,936.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian equity markets posted sizable losses during overnight trading, with the Nikkei down 1.09% and the Shanghai A Share Index down 0.29%. European stock markets are mixed this morning, with the UK FTSE-100 slightly lower while the German DAX is moderately higher. Euro-zone August PMI was revised down to 46.3 from the previous estimate of 46.6 and down from 46.50 in July.

US stock indices are generally lower while the Dollar is moderately higher this morning. Euro zone Retail Sales during July were down 0.2%, in line with market forecasts. US economic data this morning includes a reading on Productivity and Costs for the second quarter of 2012.

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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

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