Morning Gold Market Report


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Compiled 04/27/11 6:00 AM ( CT ) Statistics: London Gold Fix $1508.00 +$3.00 LME Copper Stocks 463,500 tons +3,400 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) International gold price action last night was positive, as the markets expect something supportive from the US Fed Chairman later today. However, a component of the gold trade is fearful that the era of low rates might be set to come to an end, even with the Fed company line maintaining a dovish stance. In other words, portions of the gold trade think that a change in Fed policy is on the horizon, even if the Fed indicates the need to keep rates down for a while longer. Some gold traders might be somewhat disappointed that Chinese interests backed down from bidding for Equinox against Barrick gold, as some suggest that could indicate that some gold assets are not being bid up aggressively. Apparently suggestions from the US Treasury Secretary that the US maintains a strong Dollar policy had little positive impact on the Dollar over the last 24 hours, as the Dollar has remained soft. Currency players are hardly interested in the long side of the Greenback into another reiteration of easy money policies by the US Fed later this morning. With the US Fed expected to continue its dovish tune, that is probably lending gold a measure of fresh buying interest early this morning. The US scheduled report slate isn't expected to have a noted impact on gold prices, unless the durable goods report is strong enough to lift the Dollar. The question for the bull camp is whether gold prices can remain strong after the Fed has had its say today. The bear camp will even suggest that the majority of the dialogue from the Fed today will be dovish, but that the Fed Chairman won't be able to conclude his press conference today without lodging some threats and in effect attempting to keep inflationary expectations in check. Comex Gold Stocks were 11.032 million ounces down 33 ounces. Gold stocks have declined 13 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Europe were mixed during overnight trading, early indications are for US equity markets to open today's session with moderate gains. The Dollar is weaker against most of the major currencies during overnight trading, although posting a gain versus the Yen. A credit ratings agency has downgraded Japan's sovereign debt, due to the ongoing impact of last month's Sendai earthquake on their economy. Newspaper reports indicate that Portugal may receive additional time to match budget deficit targets set by the EU and the IMF for this year and next year. Japanese Retail Sales during March was down 8.5% year-on-year, weaker than expected. UK GDP during the first quarter was up 1.8%, in line with forecasts. Euro zone Industrial Production during February was up 0.9%, in line with projections. The Federal Reserve's Open Market Committee will announce their decision on US monetary policy at the new time of 11:30 AM, with a press conference by the Fed Chairman to follow at the "old" time of 1:15 PM. Major US economic numbers to be released this morning include March Durable Goods and the Chicago Fed Midwest Manufacturing Index at 7:30 AM, and a private survey of mortgage applications released before the opening. The second leg of the Treasury's monthly refunding, the 5-year note auction, will have results announced at 12:00 PM.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Commodities
Referenced Stocks: CT

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