Statistics: London Gold Fix $1,773.75 +$13.75 LME Copper Stocks 219,475 tons -875 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Gold has a positive track to start and with the December gold contract regaining the potentially critical $1,775 level again overnight, the gold market has returned the proximity of the recent highs. A weaker dollar, higher equities and gains in a host of physical commodity markets overnight seemingly reverses the patently bearish outside market action that was seen for most of the Thursday US trade.

The trade probably drafted some fresh buying interest off news of another positive inflow of investment into gold derivative products overnight. It is also likely that comments from the ECB's Praet that a solid fiscal union in the Euro zone will prevent a break down from contagions provided gold with a measure of fresh buying interest this morning.

The press overnight was suggesting that gold was being lifted because of the residual impact from recent quantitative easing, but the recovery in global equities, namely Chinese equities, has probably fostered the majority of the short covering buying in gold.

Comex Gold Stocks were unchanged at 11.108 million ounces.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese equity markets were stronger overnight, as investors there were seemingly cheered by a rebound in a host of physical commodity prices. European equities were also higher today seemingly boosted by solidarity talk from ECB officials and perhaps because of positive leadership from physical commodity stocks.

US stocks were also showing signs of strength in the early going today, as prices managed to regain critical chart levels and now some segments of the metals market seem to be poised to return to the recent highs. The US economic report slate today is somewhat thin, with a 3rd or 4th tier mass layoff report due out and a speech from the Fed's Lockhart expected to impact the trade.
 

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