Morning Silver Market Report

Compiled 08/08/11 6:00 AM ( CT ) Statistics: London Gold Fix $1,709.75 +$44.75 LME Copper Stocks 465,300 tons +175 tons SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market failed to get as much lift as the gold market in the wake of the weekend US credit rating downgrade. Certainly silver prices have managed a somewhat impressive rally of $2.85 an ounce from last week's lows, but into the US opening today, September silver prices were still roughly $2.29 an ounce below last week's high. While silver is garnering some flight to quality lift this morning, it is clear that silver's physical or industrial back ground is holding back the rally tilt. Fears of severe global slowing, in the wake of the US ratings news has served to weaken copper prices and that in turn might have prompted some would-be silver buyers to shift toward gold. However, silver is catching some safe haven buying this morning and with the US credit ratings story a long way from running its full course, the safe haven theme is expected to remain in place. Some players in silver might even expect to get some support from upcoming US FOMC comments, while others think that ongoing weakness in the Greenback will continue to feed silver prices to higher levels. The Commitments of Traders Futures and Options report as of August 2nd for Silver showed Non-Commercial traders were net long 32,577 contracts, an increase of 710 contracts. The Commercial traders were net short 54,116 contracts, an increase of 1,528 contracts. The Non-reportable traders were net long 21,538 contracts, an increase of 818 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 54,115 contracts. This represents an increase of 1,528 contracts in the net long position held by these traders. Comex Silver Stocks were unchanged at 105.297 million ounces. Silver stocks have increased 13 of the last 20 days. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) While equity markets in Asia and Europe were generally weaker during the overnight session, early indications are that US equity markets will open with substantial losses later on today. The US Dollar is weaker against most of the major currencies this morning. G7 finance ministers announced that they will take unified steps to support financial stability and growth in the Euro zone. The European Central Bank announced that it would support Spain and Italy by purchasing their sovereign debt with their bond-buying program. There are no major US economic numbers to be released this morning.

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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