Morning Gold Market Report

Compiled 04/25/11 6:00 AM ( CT ) Statistics: London Gold Fix $1507.00 NA LME Copper Stocks 456,275 tons unch Shanghai Deliverable stocks were 139,076 tons -8,575 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The June gold contract has exploded for a fresh new all time high and given the massive range up pulse in silver, it is possible that the action in the silver market contributed to the strength in gold prices this morning. Clearly talk that the Chinese might diversify their foreign currency holdings into precious metals provided gold with a noted lift this morning, as China continues to have a pronounced impact on a long list of physical commodity markets. While the Dollar isn't markedly weaker this morning, significant gains in grain prices and higher oil prices are probably contributing to the inflationary bias in the early Monday morning US trade action. The gold market did see some positive progression from Indian gold price action overnight and the dialogue from the Asian trade was also upbeat. Apparently investors world wide are concerned with the US debt situation and the prospect of gridlock in the negotiations which in turn could result in a lack of credible budget reduction. Other traders are suggesting that the presence of an upcoming FOMC statement from the dovish leadership of the US Fed is causing pre-buying of gold this morning. Comex Gold Stocks were 10.995 million ounces down 24,125 ounces. Stocks have declined 13 of the last 20 days. The Commitments of Traders Futures and Options report as of April 19th for Gold showed Non-Commercial traders were net long 251,710 contracts, an increase of 22,817 contracts. The Commercial traders were net short 304,504 contracts, an increase of 21,322 contracts. The Non-reportable traders were net long 52,795 contracts, a decrease of 1,494 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 304,505 contracts. This represents an increase of 21,323 contracts in the net long position held by these traders. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While equity markets in Asia were mixed, most of the major European equity markets were closed for the Easter Monday holiday. Early indications are for US equity markets to open today's session with moderate gains. The Dollar is slightly weaker against most of the major currencies during overnight trading, although posting gains versus the Yen and Pound. China may create new investment funds to diversify their foreign exchange reserves, including holdings in the energy and precious metals markets. NATO air strikes hit the compound of Libyan leader Muammar Gaddafi this morning. The only major US economic number to be released this morning will be March New Homes Sales at 9:00 AM.
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