Morning Silver Market Report

Compiled 05/19/11 6:00 AM ( CT ) Statistics: London Gold Fix $1,488.75 -$3.50 LME Copper Stocks 468,275 tons -775 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The July silver contract comes into the Thursday US trade sitting moderately above the 100 day moving average and has spent a modest amount of today's early action above the prior closing level. A minor decline in silver derivative holdings yesterday afternoon might be seen as a bearish development by some traders, but the direction of the US economy might be the most significant focus of the silver trade today. In other words, the silver market might look to the US initial claims readings as a critical development. However, the silver market also saw a decline in Comex silver exchange stocks overnight of 678,863 ounces, which puts the total in the exchange at only 100.5 million ounces. Comex Silver Stocks are now at the lowest levels since 08/03/2006 and silver stocks have declined in 14 of the last 20 days. Some traders suggest that an exchange stocks reading below 100 million ounces could rekindle concerns of tightening physical supply in the mainstream media! With Pan American Silver Corp. overnight showing a year over year decline in silver production, the issue of tightening silver supply might have some traction today. However, as in gold, the silver market would seem to need positive growth and even more of an inflation vibe to see the bulls fully dominate the trade. 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 slight gains. The Dollar is slightly weaker against most of the major currencies during overnight trading, although posting a gain versus the Yen. The head of the International Monetary Fund, Dominique Strauss-Kahn, resigned after being arrested in New York. Fed Regional President Bullard suggested that that the Federal Reserve can afford to pause after the end of their quantitative easing measures in late June. Japanese GDP during the first quarter was down 0.9%, weaker than expected. UK Retail Sales during April were up 1.1%, higher than forecasts. Major US economic numbers to be released this morning include Weekly Jobless Claims at 7:30, and the Philadelphia Fed's survey of business conditions during May, a private survey of US Existing Home Sales during April as well as a private survey of US Leading Indicators during April at 9:00 AM. In addition, Fed Regional Presidents Dudley, Fisher, and Evans will give speeches during the session.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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