Morning Silver Market Report

Compiled 05/17/11 6:00 AM ( CT ) Statistics: London Gold Fix $1,495.50 +$0.50 LME Copper Stocks 468,825 tons +500 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) While July silver prices managed to respect the prior session's low in the early Tuesday US trade, the market seems to be attracted to yesterday's close. Like gold, silver saw evidence of a decline in holdings from a noted silver equity instrument and that news probably emboldens the bear camp somewhat. It seems as if outside market forces are initially favoring the bear camp in silver, as the Dollar is minimally higher and the inflationary vibe doesn't appear to be back in play yet. While silver can sometimes benefit from higher equity market indications, the gains this morning aren't that significant and silver hasn't been in a mode recently to embrace positive industrial demand signals. Silver could take some direction from scheduled US data flows this morning, especially the Housing Permits figure, which could be the key news item of the trading session. Comex Silver Stocks were 100.907 million ounces down 194,166 ounces. Comex Silver Stocks are at the lowest levels since 08/09/2006. Silver stocks have declined 13 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) While equity markets in Asia and Europe were mixed during overnight trading, early indications are for US equity markets to open today's session with moderate gains. The Dollar is slightly weaker against most of the major currencies during overnight trading, although posting a large gain versus the Yen. The Bank of Japan warned their nation's economy was in a "severe" state due to the aftereffects of the Sendai earthquake. Euro zone Finance Ministers are prepared to ask Greece's private creditors to extend the maturities of their bonds. UK CPI during April was up 4.5% year-on-year, higher than market expectations. A private survey of German economic sentiment during May was at 3.1, lower than forecasts. Major US economic numbers to be released this morning include April Housing Starts at 7:30 AM, and April Industrial Production and Capacity Utilization at 8:15 AM, and private surveys of store sales released during the session.
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