Morning Silver Market Report 9/11

 
on September 11 2012 10:18 AM

Compiled 09/11/12 6:00 AM (CT)

Statistics: London Gold Fix $1,731 -1.00 LME Copper Stocks 214,700 tons -50 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market is finding support off of expectations that the Fed will announce a quantitative program at the FOMC meeting this Wednesday and Thursday. And like gold, there may be a tendency for the market to consolidate ahead of that meeting. The German High Court announcement tomorrow on the legality of the European bailout could shake thinks up a bit if it rules against the plan, but with the FOMC meeting looming, the reaction could be postponed. The weaker dollar this morning is supportive to silver as well.

Holdings in a major silver ETF have risen to 9,803 tonnes from 9,734 previously, their highest reading since August 23rd.

We would not be surprised to see the market consolidate ahead of the FOMC meeting, with a possible bias to the upside given the high expectations. If the Fed comes through with the anticipated easing plan, we would likely see a swift move higher. Expectations are high that the Fed will act, which could set the market up for a letdown once that happens.

Comex Silver Stocks were 140.678 million ounces, down 706,515.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Asian equity markets were generally lower during overnight trading, with the Japanese Nikkei down 0.79% and the Shanghai A Share index down 0.67%.

European stock indices are under pressure, with Spanish and Italian equities down 1%. However, US stock futures were posting moderate gains during overnight trading while the Dollar was trading lower coming into this morning's session. The UK Trade deficit during July was 7.15 billion Pounds, lower than market expectations. German Wholesale Prices during August were up 3.1% year-on-year, higher than market forecasts.

US economic data during today's session will include a reading on the International Trade Balance during July.

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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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