Compiled 12/02/08 6:00 AM (CT)

Statistics: London Gold Fix $772.50 -$23.00 LME Copper stocks 293,025 tons +1,825 tons

GOLD MARKET FUNDAMENTALS: (6:00 AM CST) While the Dollar is higher this morning, traders did note that the Dollar was unable to gain against the Swiss, Yen and Canadian in the prior trading session and that seems to have dampened the negative influences from the currency markets. While the gold trade appears to be deriving some initial support this morning from positive US equity market action, the fundamental news for the gold market overnight was not that helpful. In fact, with Indian gold imports for the month of November coming in at only 35 to 40 tons, and that level of imports notably below the prior years November import tally of 54 tons, it is possible that the gold trade was presented with evidence of slackening demand in a key gold consuming country. The bears will note that February gold did manage another new low for the move overnight, while the bull camp will suggest that the new low probe was at least initially rejected rather definitively. In the short term, the gold market seems to be taking its direction from the US equity markets and since the US scheduled report slate is relative empty in the morning trade today, perhaps the bulls in silver will be able play down the threat of too much slowing this morning. It is also possible that the prospect of additional global interest rate cuts later this week is providing gold with some support, as the Australian rate cut overnight brings the issue of sharply falling rates back to the forefront.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) While the US Dollar is higher initially today and international gold market action overnight was somewhat soft, seeing a bounce in global equity prices this morning seems to have moderated the entrenched bearishness toward gold and silver into the US opening. With the ultra weak US equity market action on Monday seemingly turning up the liquidation pressure on the precious metals markets, it is possible that the action in the equity markets today will trump the action in the Dollar in the early metals trade this morning. The US economic report slate today is somewhat thin early, with the only significant market moving events coming in the form of a US Treasury Secretary speech and some mid day US auto sales figures. The metals markets might also have benefited from an Australian interest rate cut overnight and the prospect for an EU economic plan later in the week. It is also possible that the metals markets are looking ahead to the prospect of another aggressive UK rate cut later this week.