Morning Silver Market Report 9/12

 
on September 12 2012 11:09 AM

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

Statistics: London Gold Fix $1,742.75 +6.00 LME Copper Stocks 215,875 tons +1175 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The German High Court's refusal to block ratification of the ESM overnight helped push December silver to a new high for the week and to its highest level since March 12th. With that ruling out of the way, the market will focus on today and tomorrow's FOMC meeting.

The disappointing jobs data last week has the market expecting the Fed to announce a new quantitative easing program when the meeting concludes tomorrow. This is providing a lift to global equity markets and is pressuring the dollar and is also offering support to commodities, including store-of-value metals like silver. Expectations for Fed action are so high, that it does raise the risk that the market will be disappointed. But the strength off the ESM news overnight suggests that silver bulls will have the confidence to bid the market higher ahead of tomorrow's announcement.

Comex Silver stocks came in at 140.678 million ounces, down 898.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Asian equity markets were generally higher during overnight trading, with the Japanese Nikkei up 1.73% and the Shanghai A Share index up 0.28%. European stock indices are posting moderate gains as well, with the German DAX up 1%. The Dollar is sharply lower, while US stock futures are trading moderately higher going into today's session.

The German Constitutional Court gave the go-ahead for that nation to ratify the ESM bailout fund but attached several conditions including a limit on Germany's contribution without further parliamentary approval. Japanese Machinery Orders during July were up 1.7% year-on-year, higher than market forecasts. German CPI during August was up 2.1% year-on-year, in line with expectations.

Today's US economic data will include readings on August Import and Export Prices and July Wholesale Inventories. The Federal Reserve's Open Market Committee will begin a two-day meeting this morning.

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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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