Compiled 09/24/12 6:00 AM (CT)

Statistics: London Gold Fix $1,758.50 -$15.25 LME Copper Stocks 219,950 tons +475 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market appears to be starting the new trading week out with a distinct shift in sentiment, as compared to the action seen at times during last Friday's trade. In fact, to the initial low this morning, December gold was trading as much as $30 an ounce below the Friday highs. In addition to adverse currency market action, gold was also facing weakness in a host of physical commodities, weakness in equities and residual fears of slowing in the Euro zone.

Apparently gold saw little support from news that a stronger Indian currency was prompting some increased gold buying interest. In other words, regional bargain hunting buying wasn't capable of halting the initial downward track on the gold charts, as fears of global slowing were pervasive.

In looking ahead to the US trade, the market will be presented with a Chicago Fed National Activity Index reading and a Texas Manufacturing survey and from the early going, it would appear that the markets are anticipating further evidence of slowing and it could be difficult to shift macro economic sentiment completely off a couple second tier US regional Fed numbers.

Comex Gold Stocks were 11.039 million ounces down 68,360 ounces. Stocks have declined 11 of the last 20 days.

The Commitments of Traders Futures and Options report as of September 18th for Gold showed Non-Commercial traders were net long 221,267 contracts, an increase of 17,344 contracts. The Commercial traders were net short 280,767 contracts, an increase of 20,337 contracts. The Non-reportable traders were net long 59,501 contracts, an increase of 2,993 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 280,768 contracts. This represents an increase of 20,337 contracts in the net long position held by these traders.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese equity markets were mixed overnight with Hong Kong shares weaker and only minor gains seen in the Shanghai composite. Violence at a Foxconn plant in China and ongoing diplomatic tensions with Japan were probably detracting from the weak economic outlook in China at the start of the new trading week.

European equities were also off to a slightly weaker start today, as fears or slowing and ongoing anxiety toward the situation in Spain had investors a little concerned. The European markets might also have been put off balance by the German IFO report which showed the climate for business in Germany sagged again for the fifth straight month in a row.

US stocks were also showing weakness to start, perhaps because of the weak European data, or perhaps because of lingering weakness in many physical commodities, as declining commodities can hint at a risk-off environment. A couple regional US Fed activity/outlook surveys are due out later this morning and those reports are likely to give the markets some additional direction.
 

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