Morning Gold Market Report


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Compiled 04/28/11 6:00 AM ( CT ) Statistics: London Gold Fix $1531.00 +$23.00 LME Copper Stocks 463,650 tons +150 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) With another round of new all time highs posted overnight, the gold trade comes into the Thursday US trade with a bullish bias. In addition to a steady but dovish stance at the US Fed, the gold trade is also benefiting from a sharp range down extension in the US Dollar. With all the focus on US monetary policy this week, the gold market seems to have drifted away from the flight to quality focus on the precarious US debt situation but that issue could still be contributing to the latest rise to new all time highs. In general, the gold market should expect to see mostly positive economic data flow from the US today, but the Dollar hasn't shown much in the way of positive reactions to data recently, perhaps because US policy holds a dominating position in the minds of many gold traders. However, with the Treasury markets depicting inflationary concerns in the overnight action of the yield curve, it is possible that favorable US economic readings this morning will simply stoke inflation fears, as the Fed has made it clear that QE2 will run its full course and that the US might not change policy for another 2 or 3 Fed meetings. Comex Gold Stocks were 11.035 million ounces up 2,177 ounces. Gold stocks have declined 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally higher this morning. Early indications are for US equity markets to open today's session with slight gains. The Dollar is weaker against most of the major currencies during overnight trading. The Bank of Japan kept Japanese rates unchanged at today's meeting, but lowered growth forecasts due in main part to the effects of last month's earthquake. China's population rose to 1.34 billion people during 2010, nearly half of which now live in urban areas. Japanese CPI during March was down 0.1% year-on-year, a smaller decline than expectations. Japanese Industrial Production during March was down 15.3%, weaker than projections and a record one-month decline. The German Unemployment during April was 7.1%, unchanged from last month but higher than expectations. Major US economic numbers to be released this morning include Weekly Jobless Claims and 1st quarter GDP at 7:30 AM, and a private survey of Pending Home Sales at 9:00. The final leg of the Treasury's monthly refunding, the 7-year note auction, will have results announced at 12:00 PM. In addition, Fed Regional President Lockhart and Fed Governor Duke will speak during the session.

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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