Morning Silver Market Report 8/24

 
on August 24 2012 11:12 AM

Compiled 08/24/12 6:00 AM (CT) Statistics: London Gold Fix $1,666.50 +$4.00 LME Copper Stocks 235,550 tons -1,600 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market has forged some corrective action overnight. After the rather sharp run up in silver prices this week, some measure of back and fill action shouldn't be that surprising to the trade. Weaker global equity markets in Asia overnight would seem to suggest some disappointment in that region from the lack of definitive action by the PBOC this week. However, silver probably saw some support from comments from the Fed's Evans overnight in Beijing, as he called for more assistance for the US economy. On the other hand, the lack of an upside extension overnight, in the wake of the dovish Fed comments, suggests to some, that a large portion of US easing has been priced in for now. The silver market is seeing a mixed outside market environment early today, as the Euro is weaker, but the market is also seeing higher grain and energy price action in the early going. Silver might draft some residual support from news of rising investment flow into a silver derivative instrument yesterday. With the silver market seemingly accepting of easing by the Fed soon, the impact of the US Durable goods report later this morning might be somewhat diffused. Therefore, it could take a much stronger than expected durable goods reading later this morning to realty dampen the US easing bias. Comex Silver Stocks were 139.975 million ounces down 101,126 ounces. Silver stocks have declined in 11 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Asian stocks were weaker overnight, with the Shanghai composite closing at some of the lowest levels in several years. Apparently investors have become impatient with the wait for definitive easing action from the PBOC and there also seemed to be renewed concerns toward the Euro zone in Asia into the weekend. With dovish comments from a Fed member again overnight and a major US bond fund manager suggesting that QE3 was basically a done deal, it is possible that a large portion of the "buy the rumor" action off the US easing theme has been put in place for now. European shares were generally lower, despite relatively low sovereign debt rates overnight. The US report schedule today includes durable goods and expectations call for a modest rise in that reading.

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