Morning Gold Market Report
Compiled 08/08/12 6:00 AM (CT) Statistics: London Gold Fix $1,607.00 -$6.00 LME Copper Stocks 245,600 tons +550 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market has started out on a weaker footing today in the wake of less optimism toward the Euro zone debt crisis, more signs of slowing in the Euro zone and in the face of some adverse currency market action. News of another decline in South African gold output of 4% in June versus year ago levels should have lent some support to gold prices early this morning, but that news was offset by more suggestions that Indian gold festival demand was weakened off fears of an inadequate monsoon. The markets will probably take some direction from the results of the German debt auction as 3.4 billion were sold at low yields and strong demand for the safe haven German instruments. With most world equity markets losing their capacity to rally the risk-off vibe is given additional credence today. Unfortunately the US scheduled report slate doesn't look to have the news or data to prompt a reversal in initial economic vibes. Comex Gold Stocks were 10.945 million ounces up 150,311 ounces. Stocks have declined 12 of the last 20 days. Comex Gold stocks are at their highest levels in the past 10. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Chinese shares were higher overnight, with the Shanghai market managing more definitive gains than Hong Kong. European shares were weaker overnight as the anticipation of a European fix was waning. The trade was also looking ahead to a German debt auction for a reading on the level of anxiety toward all things Euro. More evidence of weakness in the European economy was seen overnight with the Bank of France predicting that France will slip back into recession in the 3rd quarter. Results from the German debt auction will probably be seen as a proxy for confidence, or the lack of, in the Euro zone. The markets might also have been undermined by disappointing macro-economic predictions from a key BOE official. The US economic report slate is somewhat thin today with a 2nd quarter productivity growth reading and a 10 Year US Treasury auction at mid-session.
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