Compiled 09/13/12 6:00 AM (CT)
Statistics: London Gold Fix $1,730.50 -6.50 LME Copper Stocks 216,425 tons +550 tons
GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market (and equities and a host of other commodities) is anxiously anticipating the results of the FOMC meeting, which are to be announced at 11:30 am central today. The market is looking for the Fed to announce a 3rd round of quantitative easing. As an indication as to how high expectations are running, yesterday an informal poll indicated that 98% of traders were expecting the Fed to eventually embark on QE III, while 77% percent were looking for it to occur today. This morning there was talk that the Fed might offer an open-ended bond-buying plan as opposed to the discrete amounts that they have done in the past.
Ongoing strikes at South African mines, including some gold mines, lend some support, as does the anxiety in the Middle East, but for the moment the FOMC meeting is the main focus. The market has gained roughly $100 per ounce since the Jackson Hole announcement and $50 since last Friday's disappointing jobs data. It was these two events that brought QE III back to the forefront in the minds of traders, so if the Fed disappoints, we could see gold give a good portion those gains. On the other hand, an "open ended" bond buying program or some other aggressive move could set gold on a new leg higher.
Comex Gold Stocks were 10.983 million ounces up 138,401. A major gold ETF saw its daily holdings fall yesterday for the first time since July 27th.
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OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Asian equity markets posted mixed results during overnight trading, with the Nikkei up 0.39% while the Shanghai A Share Index was down 0.76%. European stock indices are generally lower this morning, with Spanish equities down by more than 1%. US stock futures are posting moderate losses coming into this morning's trading, while the Dollar is slightly lower for the day. Today's US economic data will include readings on Weekly Jobless Claims and the Producer Price Index for August.
The Federal Reserve's Open Market Committee will announce changes to US monetary policy as well as a potential new program of quantitative easing measure this morning. Fed Chairman Bernanke will have a post-meeting press conference this afternoon.
*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.