Compiled 12/21/11 6:00 AM (CT) Statistics: London Gold Fix $1,637.50 +$32.50 LME Copper Stocks 371,300 tons +450 SILVER MARKET FUNDAMENTALS: (6:00 AM CT) March silver prices did manage an upside breakout on the charts overnight and in the process they reached the highest level since December 14th. However, like gold and other physical commodity markets silver has fallen back from the initial probe higher, as rumors circulate that a large portion of the take down of the tender, was taken by EU peripheral banks and to some, that suggests the financial backstop of the Euro zone isn't as diversified as was initially hoped. However, silver and physical commodities do have the initial benefit of favorable currency market action, generally positive global equity market action and the prospect of more supportive US scheduled data later in the trading session. In the end, there appears to be a risk on vibe in place today unless the doubt toward the Euro zone really gains traction ahead of the US equity market opening. News that China saw very strong monthly imports of copper, might be indirectly supportive of silver, which continues to garner most of its direction from physical commodity market developments and not from financial or safe haven type news. Given the choppy action in silver prices earlier today, it would appear that silver prices will continue to have a very tight correlation with equities. Comex Silver Stocks were 112.897 million ounces down 227,358 ounces. Silver stocks have increased in 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Equity markets in Asia were mostly higher again today. Stocks in Europe were also showing some noted strength to start the Wednesday trade. Early indications are that the US markets will also open with moderate gains later on today. The US Dollar was weaker against most of the major currencies to start this morning. In the overnight action, the markets saw what appeared to be a well received tender of Euro debt instruments, a slight rise in Euro zone bank deposits and generally strong global equity market action. US economic data to be released this morning includes Existing Home sales as well as a 7 Year US note auction. There will also be a weekly mortgage application survey due out early in the trading session. The trade will also see earnings from quasi cyclical companies like Bed, Bath and Beyond and Walgreen today.
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