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OUTSIDE MARKET DEVELOPMENTS: With the world seemingly embracing a recessionary view again, the Dollar higher and energy prices under moderate pressure, the outside markets look set to start the week out in a negative posture for the precious metals markets. In fact, with the Dollar forging a range up extension into the US opening today and crude oil prices down by almost $3.00 a barrel, the fear of too much slowing is seemingly set to dominate a number of physical commodity markets. Even the recovery currencies (Pound & Canadian) are under aggressive pressure in the early action today and that would seem to leave the bear camp in the metals with both the macro economic and currency market edge. However, the trade does appear to be expecting a minor up tick in the US ISM Non Manufacturing Index report this morning, but with the reading expected to come in well under the critical 50 pivot point level, it is unlikely that the fear of slowing, that is apparently being embraced in the world equity markets, will be thrown off as a result of the US scheduled report flow today.
GOLD MARKET FUNDAMENTALS: While the Indian gold market was seemingly undermined by talk of a Bullion import tax hike, a soaring Dollar and overt slowing fears also seemed to be applying some pressure to gold prices into the US Monday action. The bull camp in gold also seems to be fretting over the magnitude of the slide in oil prices this morning, especially since overt follow through weakness in global equity prices this morning looks to fan the fears of too much slowing even further. With the added pressure of negative dialogue on the economy from the US Administration over the weekend, it would seem like gold and other physical commodity markets are factoring in an increase in the odds of a return to deflationary type conditions. While physical supply and demand talk has been given little credence lately, seeing the prospect of negative Indian gold import demand, on top of the higher Dollar, would seem to leave the bear camp with the majority of the headlines. The tech crowd is also trumpeting the failure to hold above the $925 level on the charts in the early going today.
