Compiled 05/14/08 6:00 AM (CT)

Statistics: London Gold Fix $877.00 -$5.50 LME Copper stocks 121,775 tons +125 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The bull camp might have to play up the idea of solid consolidation support on the charts around the even number $16.50 level, as the flow of classic fundamental news on silver is lacking. In fact, with recent earnings and production news from the miners failing to offer up much in the way of hope for a surprise reduction in supply, the silver market appears to be left with the outlook for demand as the primary force impacting prices. With the demand outlook in silver recently being dominated by investment interest, over classic physical demand, it is clear that the direction of the Dollar is generally set to control. With the copper and platinum markets both showing an initial downside failure this morning, that would seem to leave the entire metals complex in a weakened posture into the potentially critical US CPI report release.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Historically precious metals prices would be poised to see some support off evidence of inflation from the US CPI report today but the markets focus on the US Dollar seems to have put inflation in a back seat mode. On the other hand, oil prices did manage another new all time high in the prior trading session and with a potentially critical US weekly oil inventory report due out after the US CPI report this morning, it is possible that the dominance of the currency theme could be tempered somewhat. However, international Press coverage overnight suggests that risk aversion is on the decline and that has seemingly left the Swiss, Yen and Euro in a weak posture and that in turn has served to firm the US and Canadian currencies. Unless sentiment changes quickly, classic inflation fears might not be able to pull gold and silver prices out of a recently weak price pattern. Apparently suggestions from former US Fed Chairman of even higher oil prices ahead and the fact that crude oil prices have basically doubled since the beginning of 2007 fails to pull investors toward gold and silver in enough force to countervail currency related selling pressure.

Technical Analysis:
Note: Compiled during previous session 05/13/2008 at 3:21 PM CBOT SILVER (JUL) 05/14/2008: Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The close under the 18-day moving average indicates the intermediate-term trend could be turning down. The swing indicator gave a moderately negative reading with the close below the 1st support number.