Compiled 06/25/09 6:00 AM (CT)

Statistics: London Gold Fix $934.25 +$5.50 LME Copper stocks 2761,600 tons -3,450 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The bull camp might be disappointed in the magnitude of the overnight gains, in the face of what might be considered patently bullish gold dialogue from a Chinese official. While some in the trade might discount the Chinese statements, because they came from a lower level economic analyst, statements from Chinese officials tend to be somewhat coordinated. Nonetheless with a Chinese official seemingly touting an expansion of gold holdings by China and suggesting that the increased holdings were needed as a hedge against a long term downtrend in the Dollar, one could have expected a big pulse up in gold prices. However, it seems as if residual Dollar strength and perhaps some disappointment from the US FOMC statement in the prior trading session has discouraged some buyers of gold into the opening today. Clearly gold bulls need to see signs of positive growth in the US and world economy, especially since the Fed didn't openly announce a ramping up of quantitative easing efforts in the prior trading session. On the other hand, the August gold contract wasn't exactly pent up for a sign of increased quantitative easing, as August gold at yesterday's lows, was roughly $70 an ounce below the June highs. Apparently fears of lower farm incomes, in the event of an inadequate or delayed monsoon in India, was being seen as a negative overnight but that tilt might be countervailed somewhat by news this morning of another weekly rise in Russian gold and currency reserves.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While the gold market seemed to garner some support from favorable Chinese comments overnight, the outside market action into the US Thursday morning trade, doesn't appear to be definitively supportive of the precious metals markets. On the other hand, it is possible that Chinese official statements about a long term decline in the US Dollar ahead, will remain a fixture in the metals markets over time. In the action today, the market sees the weekly ongoing and initial claims data as another critical measure of the direction of the US economy, but since the 1st Quarter GDP reading is now somewhat old, it is likely that the majority of the focus in the markets this morning will sit with the employment readings. The gold and silver trade might also be impacted by geopolitical developments, as there seems to be some political will, to dig into the Federal Reserve/Bank of America bailout situation. In the end, it does seem as if the precious metals bulls need favorable US economic readings and or positive equity prices to further their cause.