Markets

Morning Gold Market Report

Compiled 05/05/11 6:00 AM ( CT ) Statistics: London Gold Fix $1514.00 -22.00 LME Copper Stocks 467,450 tons +3,525 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) While June gold has initially managed to hold above the prior session's low, prices were drifting down to that level in the early Thursday US trade action. Apparently gold wasn't as inspired as the US Treasury market by comments from the Fed's Lockhart last night who made mention of QE3. While the gold market hasn't paid that much attention to classic supply side news lately, gold prices could have seen some pressure off news of an increase in gold production from Randgold in its 1st quarter. However, that potentially undermining news might have been countervailed by news that Harmony gold production declined in their 2nd quarter. It does seem as if the recent slide in precious metals prices was prompting a pick up in Indian retail demand, as ultra high prices at the end of last month reportedly discouraged some of those buyers. While the markets don't expect rate tightening from the ECB or the BOE any overly hawkish dialogue from that front could add to the bear's resolve. In conclusion, classic supply and demand news overnight for gold could have supported prices to higher levels this morning, but apparently the broad based commodity liquidation wave mentality still lurks in the marketplace. It will be interesting to see what impact the US claims figures will have on gold prices, as gold recently seems to be undermined by evidence of slowing. Fortunately for the bull camp, general expectations for the US claims, call for a rather noted decline. While the gold market hasn't paid that much attention to US productivity readings lately, it is possible that release could see its importance elevated later this morning. Comex Gold Stocks were 10.942 million ounces down 21,158 ounces. Comex Gold Stocks are at the lowest levels since 10/04/2010. 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 close to unchanged levels. The Dollar is weaker against most of the major currencies during overnight trading, although posting a moderate gain versus the Pound. Fed Regional President Lockhart said that expectations that the Fed would start tightening US monetary policy after their quantitative easing program concludes next month were "premature". The Bank of England will announce their decision on UK monetary policy at 6:00 AM, while the European Central Bank will announce their decision on Euro zone monetary policy at 6:45 AM. A private survey of UK Service Industries during April was at 54.3, lower than expectations. Major US economic numbers to be released this morning include Weekly Jobless Claims and first quarter Non Farm Productivity at 7:30 AM. In addition, Fed Chairman Greenspan and Fed Regional President Kocherlakota will give speeches 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.


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

Other Topics

Commodities