Morning Silver Market Report 10/16

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Compiled 10/16/12 6:00 AM (CT) 

Statistics: London Gold Fix $1,737.50 -$9.75 LME Copper Stocks 210,725 tons -1,550 tons 

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market forged a modest bounce overnight as overnight outside market conditions improved slightly. With mostly positive international equity market action, higher physical commodity price action and mostly supportive currency influences, the silver bulls have the edge to start the Tuesday trade. The pattern of declines in silver prices since the October 1st high seemed to result in a decline in silver derivative holdings to the lowest levels since September 19th and that in turn would seem to suggest that the washout in futures prices for most of early October has impacted some silver investors. 

The silver bulls might be emboldened by the continued rise in open interest, but part of that supportive influence is dampened by the decline in volume and fears of changing regulations for Index funds, which in turn could cause some ongoing liquidation pressure in silver and other physical commodity markets. 

Like gold, it will be interesting to see if silver will be undermined again today, in the wake of favorable US data, as favorable data was supposedly responsible for reduced easing prospects yesterday and that in turn reportedly prompted long liquidation yesterday. 

Comex Silver Stocks were 141.602 million ounces down 351,078 ounces. Silver stocks have increased in 12 of the last 20 days. 

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese stocks were higher overnight, with Hong Kong shares providing the most positive leadership. In China overnight strength in property shares overcame weakness in banking shares, but the tone in the area was mostly positive. European shares were also higher off mostly positive data flow from the US yesterday, from China overnight and from Germany early this morning. 

US shares were mostly unchanged to slightly higher early on but were still maintaining the gains forged in the prior trading session. The US scheduled data flow today will include CPI, Industrial Production, and a NAHB housing index result and expectations call for some modest improvement in the US data. 
 

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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

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