Statistics: London Gold Fix $1,758.50 -$15.25 LME Copper Stocks 219,950 tons +475 tons
SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The December silver contract has clearly reversed its track on the charts from the overtly positive track seen at the end of last week. In fact, given such a sweeping reversal on the charts overnight, it is possible that technically motivated selling dominated the early silver trade. In addition to the presence of a risk-off environment, silver is also seeing a host of physical commodity markets under renewed selling pressure and there is also a measure of macro economic slowing fears feeding into the bearish attitude. With weak global equities, soft German IFO data and adverse currency market action, the bull camp in silver is probably searching for something to countervail the definitive early edge held by the bear camp.
The bull camp has to hope that macro economic sentiment improves in the wake of a couple regional Fed surveys that will be released later this morning, but it could be difficult for second tier economic data to dramatically alter a fairly entrenched risk-off market track.
Comex Silver Stocks were 139.985 million ounces down 889,120 ounces. Silver stocks have declined in 11 of the last 20 days.
The Commitments of Traders Futures and Options report as of September 18th for Silver showed Non-Commercial traders were net long 38,215 contracts, an increase of 1,871 contracts. The Commercial traders were net short 56,885 contracts, an increase of 3,995 contracts. The Non-reportable traders were net long 18,670 contracts, an increase of 2,124 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 56,885 contracts. This represents an increase of 3,995 contracts in the net long position held by these traders.
OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Chinese equity markets were mixed overnight with Hong Kong shares weaker and only minor gains seen in the Shanghai composite. Violence at a Foxconn plant in China and ongoing diplomatic tensions with Japan were probably detracting from the weak economic outlook in China at the start of the new trading week.
European equities were also off to a slightly weaker start today, as fears or slowing and ongoing anxiety toward the situation in Spain had investors a little concerned. The European markets might also have been put off balance by the German IFO report which showed the climate for business in Germany sagged again for the fifth straight month in a row.
US stocks were also showing weakness to start, perhaps because of the weak European data, or perhaps because of lingering weakness in many physical commodities, as declining commodities can hint at a risk-off environment. A couple regional US Fed activity/outlook surveys are due out later this morning and those reports are likely to give the markets some additional direction.
*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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