Compiled 06/22/12 6:00 AM (CT) Statistics: London Gold Fix $1,570.50 -$29.50 LME Copper Stocks 252,975 tons +825 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Like gold, the silver market overnight forged another lower low probe on the charts. However, July silver was able to recoil from that new low for the move but prices were temporarily down to the lowest level since the December 2011 spike low. Clearly the fear of global slowing has been behind the slide in silver prices this week, but yesterday the fear of slowing, reached a fever pitch and it also appeared as if a portion of the trade was rushing to factor in a sustained deflationary condition. On the other hand, some press outlets overnight have suggested that the liquidation in many commodity markets this week was a liquidation inspired by declining inflation expectations, but given the scope of the washout and the magnitude of the declines in some markets, the washout appeared to be more than a mere extraction of inflation. Overnight silver did see news of a noted increased in physical silver production from a central American mining company and it was also presented with lower May silver transfers through London. With the last COT report pegging the non-reportable and non-commercial net long positioning at only 22,000 contracts and silver to the overnight low, sitting roughly $2.38 an ounce below the level where the last COT report was measured, it is likely that a significant portion of the spec long in silver has been forced out of their positions. In the near term, silver is expected to continue to track big picture macro economic views and with initial gains in US equities today and a thin US report slate, the bear camp doesn't seem to have as much control as was seen yesterday. Comex Silver Stocks were 146.004 million ounces up 721,474 ounces. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) The Nikkei was lower overnight in the wake of big losses on Wall Street yesterday, which in turn were the result of the Moody's downgrade. While Shanghai was closed, the Hang Seng and other Asian equity market measures were uniformly weaker off the US Thursday developments and they were also weaker because of renewed European slowing fears. European equities were weaker this morning, with investors concerned about a softer than expected German Ifo reading, but the markets might have seen some support from an E4 meeting. The US scheduled report slate is mostly empty today, with the exception of a weekly 3rd or 4th tier economic activity index from the Economic Cycle Research Institute. Surprisingly, the US equity markets were showing early positive action in the wake of the very hard day down yesterday and that probably serves to temper deflationary/slowing vibes that were clearly in place at times on Thursday.
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