Compiled 07/03/12 6:00 AM (CT) Statistics: London Gold Fix $1,608.50 +$12.25 LME Copper Stocks 255,175 tons -1,125 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Like gold, September silver has managed to forge a fresh upside breakout overnight and in the process the silver market has reached up to the highest level since June 21st. It would appear that silver is also garnering most of its lift from anticipation of additional central bank easing, which in turn was given a noted lift off the latest reduction in the Chinese reserve rate requirement overnight. Unfortunately for the bull camp, investment demand for silver might continue to be seen as somewhat soft, in the face of an ongoing decline in silver derivative holdings, especially since that reduction has taken place in the face of a $1.80 per ounce 4 day rally in silver futures prices. Therefore silver futures prices seem to be primarily leading the way higher and so far, bullish sentiment hasn't become broad based. If the silver market is truly locked onto the hope for additional easing, that should mean September silver prices could soften a bit in the face of initial US scheduled data flows later this morning. It would seem like the precious metals markets are primarily focused on the prospect of easing from the ECB and therefore data from the US this morning might not upset the initial bull track in prices. Comex Silver Stocks were 146.533 million ounces up 599,997 ounces. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) With the exception of the Australian equity market, Asian equities were all higher overnight off China's latest attempt (a RRR reduction) to stir their economy. European shares were also higher overnight off ideas that the ECB might be poised to reduce interest rates Thursday in an attempt to cushion the European economy against an ongoing wave of softening global activity. Overnight Euro zone May PPI showed a rather surprising decline of 0.5% and for some that stokes fears of a deflationary spiral. The US scheduled report slate today will present a US Factory orders report, US auto sales figures and a New York ISM Business Index reading. The trade expects a minimal gain in auto sales and also from the Factory orders data but those reports aren't likely to markedly improve overall sentiment.
Join the Discussion