Morning Silver Market Report 10/11

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Compiled 10/11/12 6:00 AM (CT)

Statistics: London Gold Fix $1,767.25 +$4.25 LME Copper Stocks 219,550 tons +125 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market has managed to claw back above the prior two highs in the early action today. Silver is probably drafting off the positive action in gold and perhaps silver is also benefiting from the positive action in US equities in the early going. Fortunately for the bull camp, the rest of the metals complex is tracking higher and both grain and energy markets are showing positive action in the early going and that hints at the presence of a risk-on vibe. Perhaps the S&P downgrade of Spain and a jump in some Euro zone sovereign debt yields overnight are serving to restrain the initial positive track in silver prices.

At least in the early going, the silver market was seeing some headwinds from a weaker Euro and it seems as if silver and other physical metals markets are going to look toward US claims and US equity market action today as primary leading indicators.

Comex Silver Stocks were 144.419 million ounces up 841,273 ounces. Silver stocks have now increased in 12 of the last 20 days.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese stocks were mixed again overnight, as Hong Kong shares managed to rise while Shanghai and Shenzhen shares were lower perhaps because of overnight comments from the Fed's Yellen that suggested Asian economic momentum had slowed recently. European stocks might have been knocked off balance by the S&P downgrade of Spain, but some markets have spun that development into a positive, as statements from the S&P credit analysts suggested that seeing Spain wait to request an official bailout was partly behind the credit rating cut. It is also possible that calls for reduced austerity in Europe, to battle the threat of recession, have provided the metals markets with a lift this morning.

US equity markets were also higher early on as investors saw favorable earnings results in Europe and there was some residual positive spin seen from yesterday's US Fed Beige book release.

Today the markets will be presented with a weekly claims reading, that might take on added importance because of the looming election and also because of the surprising decline in the US unemployment rate last Friday. Also due out today, are US Trade numbers, a flurry of speeches from the Fed and a 30 Year bond auction in the early afternoon.
 

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