Morning Silver Market Report

   on June 08 2012 10:35 AM

Compiled 06/08/12 6:00 AM (CT) Statistics: London Gold Fix $1,576.00 -$44.75 LME Copper Stocks 229,675 tons +375 tons Shanghai copper stocks -14,623 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Like gold, the July silver contract has come under rather definitive pressure overnight. With the rather definitive reversal yesterday and the fresh downside action this morning that probably leaves the technical setup in silver squarely in the bear's camp to start today. The bears will suggest the silver market was short term overdone with the fantastic rally earlier this week and they might also point to the temporary probe below even number $28.00 this morning as a sign of a near term down trend pattern. The bull camp will have to hope that an initial rejection of the early slide below $28.00 hints at some type of value zone on the charts, but it would not seem like international macro economic headlines are going to favor the risk on crowd today. Fears toward Spain have escalated in the wake of a Spanish credit downgrade overnight and fears were also fanned as a result of talk that Spain will probably ask for additional funds from the EU this weekend! Some silver bears are even suggesting that the lack of additional easing measures from China and from the US this week, are really the main elements behind the current slide in silver prices. Silver traders probably need to look over their shoulder to the action in the US equity markets for direction today, as the US economic report slate might not garner much attention. Comex Silver Stocks were 143.486 million ounces up 560,074 ounces. Comex Silver Stocks are now at the highest levels since 08/06/2008. Silver stocks have increased 13 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese stocks were weaker again overnight, with some measures posting the biggest weekly losses in six months. Apparently investors and traders in China took the surprise Chinese rate cut as a sign that more negative economic news will be seen directly ahead. European equities were also weaker overnight, as the trade remains concerned over the situation in Spain, especially after a credit ratings change overnight. Rumors overnight are now suggesting that Spain will make a formal request this weekend for more funds. Early US equity market action is also weaker again, as trouble in the Euro zone, residual slowing fears from the US and a lack of definitive direction from the Fed this week has left investors unsettled. However, with another Fed member overnight suggesting that the US was in need of additional easing, a portion of the negative international economic vibe was tamped down. On the other hand, the US economic report slate today somewhat thin with Trade Balance and a wholesale trade figures due out. Therefore, the focus of the markets might remain on Spain and their potential weekend request for funds. The market might also see some reaction to McDonalds same store sales figures which will be released early this morning.

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