Compiled 02/28/11 6:00 AM (CT) Statistics: London Gold Fix $1409.75 +$24.25 LME Copper Stocks 421,000 tons +4,175 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) At times last night, silver prices soared above the prior session's highs before settling back from the initial rally attempt. However, with silver prices managing gains at times in excess of 50 cents an ounce and managing those gains in the face of weaker global equity price action, it is clear that silver is embracing a flight to quality mentality this morning. Some players are concerned that soaring oil prices could serve to trip up the global economy and in turn reduce the inflation threat, while others think that higher oil prices will ultimately fuel inflation pressures even further. Weakness in the Dollar seems to be providing silver with some lift this morning and some silver bulls are hopeful that somewhat hot US consumer spending figures this morning, will be another development that serves to fuel the inflationary theme in the marketplace. In fact, some traders are suggesting that seeing the US pass a bill to temporarily extend US government operations and in turn increase the US deficit cap, could lend some support to silver prices directly ahead. Comex Silver Stocks were 102.929 million ounces up 598,486 ounces. Silver stocks have declined 11 of the last 20 days. The Commitments of Traders Futures and Options report as of February 22nd for Silver showed Non-Commercial traders were net long 43,476 contracts, a decrease of 626 contracts. The Commercial traders were net short 61,591 contracts, an increase of 2,817 contracts. The Non-reportable traders were net long 18,115 contracts, an increase of 3,444 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 61,591 contracts. This represents an increase of 2,818 contracts in the net long position held by these traders. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally weaker this morning. Early indications are for the US stock market to open today's session with slightly weaker. The Dollar is weaker against most of the major currencies during overnight trading, although posting a small gain against the Yen. President Gaddafi of Libya has continued to hold power, even with rebel forces in control of additional cities over the weekend. The new ruling coalition in Ireland will attempt to renegotiate the terms of their recent EU bailout. Euro Zone inflation during January was up 2.3% year-on-year, lower than expectations. Japanese Industrial Output during January was up 2.4%, lower than forecasts. Major US economic numbers to be released this morning include January Personal Spending and Income, a PCE Deflator at 7:30 AM, a private survey of Chicago Purchasing Managers at 8:45 AM, and a private survey of Pending Home Sales at 9:00 AM. In addition, Fed Regional Presidents Dudley and Rosengren will give speeches during today's session.
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