Morning Gold Market Report

Compiled 08/02/11 6:00 AM ( CT ) Statistics: London Gold Fix $1,624.00 +$10.50 LME Copper Stocks 465,625 tons -400 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Thegold marketappears to have shifted its focus somewhat from the US debt ceiling travails, to a combination of long term US credit concerns and to a degree to the uncertainty being thrown off by the global economy. Some traders think the actual debt vote in the US will be cause for a slight weakening of gold prices today, but in general the gold trade seems to be fully expecting a passage of the legislation and therefore the residual impact on gold prices should be limited. Despite seeing a dollar trade up to the highest levels since July 21st this morning, the currency market impact on gold prices appears to be very limited. Thegold marketmight have garnered some lift from recent news of central bank buying by South Korea, but in the lead up to the US debt scare, it is possible that a number of central banks were stepping up and increasing their gold reserves. The South African labor issues continue but recently gold hasn't garnered too much in the way of direction from that story. While some gold players might be buying gold off the evidence of slowing, the confluence of events over the last two trading sessions makes it difficult to determine gold's distinct reaction to weak data and while there is a debt ceiling vote hanging over the market today, the US personal Spending and Income readings might have enough of a vacuum early today to get a read on how the gold trade's is reacting to US data. Comex Gold Stocks were 11.434 million ounces up 2,398 ounces. Gold stocks have declined 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia and Europe were generally weaker during the overnight session, early indications are that US equity markets will open with moderate losses later on this morning. The US Dollar is stronger against most of the major currencies this morning, although posting a loss versus the Swiss Franc. The House passed a bill raising the US debt ceiling last night, with the Senate expected to vote on that legislation today. Italian government officials are scheduled to meet today to discuss issues which have sent their bond yields up to record high levels. Euro zone PPI during June was up 5.9% year-on-year, in line with estimates. Major US economic numbers to be released this morning include June Personal Income and Spending at 7:30 AM, as well as private surveys of store sales released 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.

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