Morning Gold Market Report

Compiled 05/26/11 6:00 AM ( CT ) Statistics: London Gold Fix $1,521.50 -$5.50 LME Copper Stocks 468,225 tons -1,150 tons Shanghai Deliverable stocks were 90,108 tons -15,357 GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Despite some favorable press coverage overnight, gold prices this morning are starting out on a slightly softer footing. From the overnight action, gold saw favorable longer term demand forecasts from the World Gold Council in the form of predictions of a large jump in Chinese gold imports but the market also saw upbeat Chinese gold production news from a Chinese mining official. While Indian gold prices showed some initial strength overnight, prices have retrenched into the early US Thursday action, perhaps because the trade saw news of a rise in gold production from a Chilean miner, or perhaps because of a slight return to risk associated investments this morning. However, with the prediction of rising Chinese gold import demand covering three years into the future, the gold trade could continue to see residual support from the Chinese demand front. However, it is possible that an "as expected" decline in US claims figures later this morning could facilitate even more interest in the "risk-on" mentality. The gold market might be seeing some pressure from news overnight that a Mexican miner was hedging some gold and silver production, as that provides the market with implied supply and that might also serve to temper bullish sentiment. Comex Gold Stocks were 11.146 million ounces down 17,250 ounces. Comex Gold stocks are at the lowest in the past 10 readings. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Global equity markets benefited from follow-through momentum after a positive US trade Wednesday, and that inspired gains in most Asian markets overnight. That optimism, along with a weaker US Dollar and a boost in risk taking appetites carried over into the European trade. US equity futures are up showing early gains, but have slipped from their morning highs. The US Dollar broke down to a new 4-session low this morning, while the Australian dollar and Euro Currency rallied. April import prices in Germany declined from March and came in at the lower range of expectations. There was also a report on Italian Business Confidence earlier this morning that came in below expectations. The US economic calendar presents another read on Q1 US GDP and weekly Initial Jobless Claims at 7:30 CT.

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