Morning Gold Market Report

Compiled 08/05/11 6:00 AM ( CT ) Statistics: London Gold Fix $1,665.00 +$.75 LME Copper Stocks 465,125 tons -200 tons Shanghai Deliverable stocks were 118,200 tons +1,133 GOLD MARKET FUNDAMENTALS: (6:00 AM CST) According to international press coverage, the world is expressing its displeasure with global leaders by selling stocks and buying flight to quality instruments. An equal portion of the press lays the blame of sharp equity market losses this week on the weak global economy, which in many cases is made out to be even more precarious because many governments and central banks are thought to be handcuffed by debt and policy restrictions. The gold market saw a round of higher gold price forecasts floated again overnight, but the market was also presented with news of a double digit month over month increase in Chinese gold production overnight. While the Chinese gold production gain might have a negative impact on gold pricing in normal market conditions, heightened anxiety and the lack of alternative flight to quality instruments probably means that the gold trade will give classic supply side stories little attention. Some gold bulls are a little concerned with gold's temporary setback yesterday, as that action seemed to be partially tied to the broad based washout in commodities. In other words, the idea that a slower economy is bullish to gold, was at least temporarily challenged yesterday and therefore some traders will be watching gold's reaction to the US numbers this morning very closely. While the dollar managed another new high for the move overnight, it was unable to hold those highs and into the US open today, the dollar was actually below yesterday's closing level. In the end, it is possible that currency action yesterday was at least partially responsible for the mid day weakness in gold. Comex Gold Stocks were 11.440 million ounces up 7,204 ounces. Stocks have declined 13 of the last 20 days. Comex Gold stocks are at their highest levels in the past 10. 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 today. The US Dollar is weaker against most of the major currencies this morning. Early indications are that the Bank of Japan sold 4.5 trillion Yen during yesterday's intervention, a record amount. Germany, France and Spain are scheduled to have talks concerning the financial markets later on this morning. The French Trade deficit during June was 5.6 billion Euros, a smaller deficit than expected. A private survey of UK Housing Prices was up 0.3%, slightly higher than expectations. The UK PPI during June was up 5.9% year-on-year, in line with forecasts. Major US economic numbers to be released this morning, include July Non-Farm Payrolls, July Private Payrolls and July Unemployment at 7:30 AM.

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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