Compiled 11/20/08 6:00 AM (CT)

Statistics: London Gold Fix $745.25 +$7.50 LME Copper stocks 281,625 tons +1,575 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Apparently the silver market isn't seeing a noted increase in flight to quality interest like the gold market. While some might suggest that gold is simply rising because of the prospect of severe reductions in global interest rates, that angle would seem to suggest that inflation will eventually result. However, with a patently deflationary environment seemingly dominating the headlines and a host of physical commodities showing aggressive liquidation action, it isn't surprising to see silver prices caught between conflicting fundamental forces. In other words, silver is probably seeing some flight to quality buying interest and certainly seeing gold prices firm a bit provides some spillover support to silver but in the end, the silver trade seems to be unable to completely shed its physical commodity market mantel. While the silver market saw another minor decline in silver exchange stocks overnight, the market was also presented with news that Hochschild was set to hit their initial 2008 silver production target. In the end, it is possible that ongoing interest in derivative gold and physical gold instruments will provide some support for silver prices, but given the sharp ongoing slide in equity prices, the deflationary drag on silver prices might be difficult to overcome.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) With gold and silver prices higher overnight in the face of strength in the Dollar, it would seem like the precious metals markets are once again being seen as flight to quality instruments. Seeing gold and silver as flight to quality instruments would seem to suggest that anxiety toward the global macro economic condition has surged to an even higher level in the last 24 hours of trade. In fact, with a number of press outlets overnight trumpeting the prospect of a deflationary spiral, the strength in gold and silver prices is really noteworthy. In other words, even though the trade seems to expect harsh deflationary price action ahead in a host of physical commodity prices, some traders are seeing value in gold and silver and that would in turn seem to suggest that "some" players think the global financial mess is capable of meltdown. While gold and silver prices don't appear to be as concerned about the ongoing threat of slowing today, the US will release a series of economic reports this morning, which includes initial claims, Leading Indicators and a Philly Fed survey and the early expectations call for those readings to depict further slowing.