Morning Silver Market Report

on September 17 2012 10:30 AM

Compiled 09/17/12 6:00 AM (CT)

Statistics: London Gold Fix $1,767.25 -5.25 LME Copper Stocks 216,700 tons -475 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) December silver futures overnight have started out on a weaker footing, after a rather stellar run up last week. Perhaps silver was indirectly undermined by a minor silver price forecast reduction from a major European bank overnight or perhaps silver was simply put off balance as a result of adverse outside market action. In fact, weaker global equities, weaker energy prices and adverse currency market action has probably prompted some profit taking in December silver after last week's low to high rally of roughly $2.47 an ounce! With the US Fed easing action seemingly factored into prices, it is possible that silver now needs to see evidence of ECB easing and or additional Chinese central bank support to consolidate a large portion of the September price gains on the charts.

At least in the near term, soft scheduled data might be seen as a negative to silver prices, as the recent move by the US Fed suggests that it could be a while before weak data can be expected provide fresh support to physical commodity prices like silver. Comex Silver Stocks were 141.666 million ounces up 583,416 ounces.

Stocks have declined in 11 of the last 20 days.

The Commitments of Traders Futures and Options report as of September 11th for Silver showed Non-Commercial traders were net long 36,344 contracts, an increase of 1,051 contracts. The Commercial traders were net short 52,890 contracts, an increase of 4,106 contracts. The Non-reportable traders were net long 16,546 contracts, an increase of 3,053 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 52,890 contracts. This represents an increase of 4,104 contracts in the net long position held by these traders.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Asian equity markets were weaker overnight in the face of escalating tensions between Japan and China. European stock indices were modestly lower as the positive influence of last week's easing news was seemingly missing in the early going today.

Apparently fresh reforms in India were unable to spark optimism in that country as a long overdue hike in domestic energy prices last week was seen as an inflationary threat. News that the US might file a trade complaint against China was another factor that might have been contributing to the risk off vibe that was in place in the early Monday US trade action.

Today the markets will be presented with a US Empire State Manufacturing report that is generally expected to remain in negative territory.

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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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