Morning Silver Market Report 9/10

   on September 10 2012 10:46 AM

Compiled 09/10/12 6:00 AM (CT)

Statistics: London Gold Fix $1,732.75 +4.75 LME Copper Stocks 214,750 tons -1,300 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) As US economic data continues to disappoint, the market's expectations for the Fed to start another round of quantitative easing grows, and that has traders looking to buy precious metals, including silver, as a hedge. Friday's disappointing jobs data seemed to convince the market that the Fed may be forced to act ahead of the election, raising the possibility of an announcement after the FOMC meeting this week.

December silver traded both sides of unchanged overnight as it consolidated Friday's upside breakout that followed the jobs report, and we would not be surprised to see silver move in a mostly sideways pattern ahead of the FOMC meeting on Wednesday and Thursday.

Comex Silver stocks were 141.385 million ounces up 570,249.

The Commitments of Traders Futures and Options report as of August 28th showed non-commercial traders were net long 35,293 contracts, an increase of 4,430 contracts for the week. Non-commercial and nonreportable traders combined held a net long position of 48,786 contracts, an increase of 6,626. The buying trend is positive. Spec net long positions are the highest they have been since March, but they are a long way from being historically overbought.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Asian equity markets were mixed during overnight trading, with the Japanese Nikkei down 0.03% while the Shanghai A Share index was up 0.33%. European stock indices are generally close to unchanged levels early this morning, although Italian stocks are down by more than 0.50%. US stock futures are posting moderate losses during overnight trading, while the Dollar has recovered a small portion of Friday's huge selloff.

The Chinese trade surplus during August was 26.7 billion Yuan, larger than expected and due in large part to a sharp drop in Chinese imports. Japanese GDP during the second quarter was up 0.7%, lower than market expectations.

US economic data during today's session will include a reading on July Consumer Credit released after the close.

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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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