Compiled 07/08/08 6:00 AM (CT)

Statistics: London Gold Fix $929.25 +$8.25 LME Copper stocks 122,175 tons +100 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) Fortunately for the bull camp the gold market is not paying that much attention to classic supply fundamentals as the Press overnight was trumpeting news that China might have scored another new and rather significant gold find. However, the fundamental news overnight wasn't all bearish, as the Press continued to rehash the favorable demand pattern in the UAE and it was also noted that AngloGold was raising capital to potentially reduce gold hedge positions. In other potentially supportive fundamental news, geopolitical concerns have rekindled again with Iranian comments overnight that they would retaliate against the Israeli Capitol and the US Navy in the event they were attacked. However, Indian gold prices showed some positive action overnight before the weakness in international oil prices served to drag gold prices downward. As in a number of other physical commodity markets, the fear of too much slowing seems to have left the bear camp with more ammunition than the bull camp and that could make the flow of US economic reports this morning very important to the gold trade.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) With the Dollar sitting within the prior day's trading range, the gold and silver markets have little to go on from the currency market action overnight. However, with expectations calling for more US slowing evidence in the scheduled numbers today there is a portion of the currency trade anticipating further weakness in the Dollar directly ahead. However, a sharp slide in oil prices in the prior trading session and some follow through weakness again this morning as well as weakness in a broad cross section of physical commodities in the prior trading session would seem to leave the precious metals markets concerned about more deflationary price action ahead. With several potentially weak US economic readings due out today and the US corporate earnings cycle kicking off today, the trade might logically retain their fear of too much slowing and in the past that type of concern has favored the bear camp.

Technical Analysis:
Note: Compiled during previous session 07/07/2008 at 3:21 PM CT CBOT GOLD (AUG) 07/08/2008: A bearish signal was triggered on a crossover down in the daily stochastics. Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. The close above the 9-day moving average is a positive short-term indicator for trend. The market's close below the pivot swing number is a mildly negative setup.

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