Compiled 10/14/08 6:00 AM (CT)

Statistics: London Gold Fix $849.50 -$15.50 LME Copper stocks 211,800 tons +2,475 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market continues to trade with the gold market in the overnight action, but clearly silver is lagging behind the euphoric gains being seen in the platinum and copper markets. We doubt that silver production news from a major US silver producer is of much importance to the silver market today, as the trade remains fixated on the ebb and flow of the financial crisis and the prospects for the overall economy. In the near term, recovery action in a host of physical commodity markets and a slight weakening of the US Dollar looks to provide the silver market with at least an initial positive tilt. However, in looking at the action in silver over the last 24 hours, some traders are suggesting that silver will continue to follow other market action instead of forging its own course. For the time being, it would appear that silver is an industrial commodity in a somewhat positive macro economic environment.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) With the precious metals markets showing slightly positive early action today, it would seem like the flight to quality liquidation interest has leveled out somewhat and that prices are in some ways benefiting from improving macro economic expectations. It is possible that the fear of significant slowing and deflation prompted some of the overly aggressive long liquidation in gold over the last several trading sessions, but with the Dollar showing some signs of weakness this morning, that appears to be countervailing some of the safe haven selling incentive. In fact, with the biggest up day ever in the history of the US stock market on Monday and more gains being mounted in the early going today, that would seem to suggest that dire slowing fears were somewhat overblown. With the US economic report slate today remaining rather thin, that might allow the optimism toward the economy to sustain further and that in turn could leave the bull camp in gold and silver in a somewhat favorable position. Surprisingly the markets overnight seemed to discount a very weak set of economic readings from Germany!