Morning Silver Market Report

 
on August 21 2012 10:45 AM

Compiled 08/21/12 6:00 AM (CT) Statistics: London Gold Fix $1,624.00 +$8.75 LME Copper Stocks 234,500 tons +350 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The September silver contract managed a fresh upside breakout overnight, and in the process reached up to the highest level since June 19th. Like gold, silver was probably boosted by generally positive international equity market action. Favorable currency market action and gains in a long list of critical physical commodity prices overnight more than likely added to the bull's case. Sharply higher grain prices might also have fostered an increase in inflation expectations, but recently a lack of global economic confidence has probably left inflationary sensitivity somewhat limited. While silver hasn't paid that much attention recently to supply side developments, news that Peru saw an increase in silver production for the month of June over last year, could be considered a negative for silver prices today. With silver prices managing a breakout up on the charts overnight, it is possible that some of the buying this morning is technically inspired, especially since the last COT positioning report showed silver to be holding a relatively small net spec and fund long positioning. Silver is likely to see some reaction to a US Fed speech early today, but given a thin US economic report slate today, it might continue to take a lot of direction from the action in US equities. Comex Silver Stocks were 140.461 million ounces down 215,235 ounces. Silver stocks have declined 12 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT)Chinese stocks were stronger overnight. Corporate earnings prompted some buying overnight and that allowed the Shanghai Composite to rise to some of the highest levels for the month of August. French and German shares were also higher overnight, as talk of European bond buying kept attitudes positive toward the EU debt situation. The US scheduled report slate is rather thin today, with only some private chain store sales readings due out early and that could leave a speech from the Fed's Lockhart early in the session as the most important development of the trading session.

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