Morning Silver Market Report

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Compiled 08/27/12 6:00 AM (CT)

Statistics: London Gold Fix $1,666.50 N.A. LME Copper Stocks 235,550 tons N.A. tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market managed a somewhat significant range up extension into new high ground overnight. In the process September silver managed to reach the highest level since May 1st. While silver has fallen back rather significantly from the initial highs, the silver market appears to be generally out performing the rest of the metals complex on the upside.

Like gold, silver seems to have been discouraged by the lack of fresh easing dialogue from the Chinese leader and it also seems as if weaker global equity markets have served to undermine silver prices somewhat. The silver trade has been factoring in fresh US Fed easing into the September FOMC meeting and therefore 2nd and 3rd tier economic data from the US directly ahead isn't expected to alter expectations in the marketplace today.

Comex Silver Stocks were 139.920 million ounces down 55,338 ounces. Silver stocks have declined 12 of the last 20 days.

The Commitments of Traders Futures and Options report as of August 21st for Silver showed Non-Commercial traders were net long 22,209 contracts, an increase of 6,506 contracts. The Commercial traders were net short 34,042 contracts, an increase of 9,997 contracts. The Non-reportable traders were net long 11,832 contracts, an increase of 3,490 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 34,041 contracts. This represents an increase of 9,996 contracts in the net long position held by these traders.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese stocks saw significant weakness overnight as the trade was disappointed in the lack of fresh easing hints from the Chinese Premier. European stocks were also softer off revived slowing fears and also because of comments from Bundesbank officials who were pointing out the potential pitfalls of European bond buying. With German Business Confidence also softening overnight, the trade enters the new trading week fearful that slowing could be poised to pull the German economy back toward recession.

In the US, the economic report slate today has a couple regional Fed manufacturing reports due out, with the Chicago Fed Manufacturing report potentially taking center stage.

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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

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