Compiled 05/14/08 6:00 AM (CT)

Statistics: London Gold Fix $865.00 -$12.00 LME Copper stocks 121,425 tons -350 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Surprisingly Indian gold prices were initially higher overnight despite adverse currency influences and that might suggest that buyers in that country are still periodically enticed into bargain hunting buying on breaks. While certain Press outlets overnight pointed to evidence of physical buying interest, there certainly seems to be a large portion of the trade anticipating more near term gains in the Dollar. In fact, despite rising inflationary concerns, that would have historically benefited the gold market, it would seem like global growth prospects and or global inflationary expectations haven't reached a high enough level to rekindle investment or speculative interest in gold. However, minor strength in the Indian and European gold markets overnight would seem to suggest that the bear camp isn't completely in control of gold prices into the potentially ultra critical US CPI and oil inventory data today. With classic physical supply and demand news on gold absent in the headlines overnight, the gold market is possibly set to react conclusively to outside market action today.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Historically precious metals prices would be poised to see some support off evidence of inflation from the US CPI report today but the markets focus on the US Dollar seems to have put inflation in a back seat mode. On the other hand, oil prices did manage another new all time high in the prior trading session and with a potentially critical US weekly oil inventory report due out after the US CPI report this morning, it is possible that the dominance of the currency theme could be tempered somewhat. However, international Press coverage overnight suggests that risk aversion is on the decline and that has seemingly left the Swiss, Yen and Euro in a weak posture and that in turn has served to firm the US and Canadian currencies. Unless sentiment changes quickly, classic inflation fears might not be able to pull gold and silver prices out of a recently weak price pattern. Apparently suggestions from former US Fed Chairman of even higher oil prices ahead and the fact that crude oil prices have basically doubled since the beginning of 2007 fails to pull investors toward gold and silver in enough force to countervail currency related selling pressure.

Technical Analysis:
Note: Compiled during previous session 05/13/2008 at 3:21 PM CT CBOT GOLD (JUN) 05/14/2008: Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market is in a bearish position with the close below the 2nd swing support number.

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