Compiled 10/17/12 6:00 AM (CT)

Statistics: London Gold Fix $1,747.75 +$10.25 LME Copper Stocks 224,450 tons +13,725 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Like gold, silver prices managed a higher high overnight even if prices eventually fell back to the prior session's closing level into the early US trade. Silver seems to have increased its focus on the action and direction of gold prices and perhaps silver has also de-linked somewhat with a more industrially focused copper market. However, silver was able to forge some gains in the wake of positive US data yesterday and that suggests silver is also starting to get beyond a constant hope and focus on the prospect of more central bank easing. Therefore silver might now need to see consistently positive US scheduled data, positive US equity market action and a risk-on environment to make more ground on the upside.

Hindering silver somewhat today is overnight news of a rather noted quarterly rise in silver production from Polymetal, a Russian miner. To confirm a focus on growth today in the silver trade probably requires a positive silver price reaction to US housing data.

At least in the early going today, silver was benefiting from supportive currency market action and generally positive European and US equity market action.

Comex Silver Stocks were 142.163 million ounces up 561,944 ounces. Silver stocks have increased 13 of the last 20 days.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese stocks were mostly higher overnight, with the Hang Seng reaching up to a fresh 7 month high. Once again the Chinese markets were lifted by strength in Banking and financial shares.

European shares were mixed to slightly higher overnight with the CAC down early and the DAX higher. European investors could have been cheered slightly by a rise in Euro zone Construction Output and perhaps the markets were relieved that Moody's decided not to cut Spain's credit rating.

US shares were mostly unchanged with the trade looking ahead to US housing starts and permits data, that will be released later today. Expectations for the US Housing data call for a minor improvement in Housing starts, but not much change in the more forward looking Housing permits figures.

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