Compiled 09/10/12 6:00 AM (CT)

Statistics: London Gold Fix $1,732.75 +4.75 LME Copper Stocks 214,750 tons -1,300 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market is trading somewhat lower this morning following a big breakout to the upside on Friday. Inflationary expectations are on the rise in anticipation of the Fed embarking on a third round of quantitative easing, which could be announced when the FOMC meets this Wednesday and Thursday. There has been some question as to whether they would make any substantial move ahead of the election for fear that they would appear "too political," but the poor jobs report on Friday added urgency, and the market seems to be betting on something happening this week. We would not be surprised to see gold consolidate Friday's gains ahead of Thursday.

There was more disappointing data out of China overnight, as August imports fell 2.6% in August from a year ago versus expectations calling for a 3.5% increase. Germany's high court is expected to rule on the ESM this week as well, possibly on Tuesday. A negative decision could support the dollar and pressure gold, but FOMC anticipation will likely prevent any dramatic moves until later in the week.

Comex Gold Stocks were 10.919 million ounces down 2,366.

The Commitments of Traders Futures and Options report as of September 4th showed non-commercial traders were net long 184,724 contracts, an increase of 17,605 for the week. Non-commercial and nonreportable traders combined held a net long position of 235,502, an increase of 18,736. The buying trend is supportive. The net long positions are the highest they have been since February, but they are sill more than 100,000 contracts below their record highs. One could say they are approaching overbought territory but are not necessarily in it.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian equity markets were mixed during overnight trading, with the Japanese Nikkei down 0.03% while the Shanghai A Share index was up 0.33%. European stock indices are generally close to unchanged levels early this morning, although Italian stocks are down by more than 0.50%. US stock futures are posting moderate losses during overnight trading, while the Dollar has recovered a small portion of Friday's huge selloff. The Chinese trade surplus during August was 26.7 billion Yuan, larger than expected and due in large part to a sharp drop in Chinese imports. Japanese GDP during the second quarter was up 0.7%, lower than market expectations.

US economic data during today's session will include a reading on July Consumer Credit released after the close.

View All Market Commentary

*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.