Compiled 05/16/08 6:00 AM (CT)

Statistics: London Gold Fix $885.00 +$18.75 LME Copper stocks 121,225 tons +375 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) With the Silver market seemingly caught in a consolidation pattern on the charts over the last two weeks, it is possible that the trade is either conflicted on the upcoming direction of prices, or it is possible that the market is simply caught between classically bearish physical commodity market fears of slowing economic growth ahead and the ongoing bullish influence of surging investment interest. Clearly silver is periodically being pulled around by the action in the US Dollar and that action has periodically conflicted with classic fundamental developments in the marketplace. In fact, the conflict in the silver market has apparently resulted in the CFTC responding to complaints about market manipulation. However, the regulator has apparently looked into the manipulation complaints and has not found evidence to support the manipulation claims. In the end, silver simply wasn't embraced globally as the primary flight to quality instrument over the last two years like the gold market and that might explain the silver markets inability to make new all time highs like gold, platinum and copper prices. On the other hand, the bull camp in silver should be heartened by the fact that investment interest in silver not only held up in the March through May $5.00 per ounce washout, but one large silver ETF actually showed a persistent escalation of silver held in trust throughout the washout in silver prices. However, in the short term many silver traders seem to think that silver will continue to track inversely with the Dollar, with little attention being paid to classic supply and demand fundamentals.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Apparently minimal weakness in the US Dollar in the face of ongoing slowing evidence is a favorable environment for the precious metals markets. One almost gets the sense that favorable global equity market action is serving to gloss over the lingering evidence of slowing in a number of critical economic zones and that in turn is allowing minor weakness in the Dollar to dominate the trade in metals. Surprisingly the metals markets managed to discount what appeared to be a rather significant washout attempt in the energy complex in the prior trading session, but with crude oil prices in the early going today sitting nearly $5.00 a barrel above the prior session's lows, it is clear that the energy bulls aren't easily discouraged. With the US economic report slate today somewhat active and largely expected to present more slowing evidence, it would seem like the US trade is expecting weak Dollar support again today. In fact, some traders seem to be hopeful of a perfect storm day today, with the US Dollar weaker, equities higher and oil prices firm.

Technical Analysis:
Note: Compiled during previous session 05/15/2008 at 3:21 PM CBOT SILVER (JUL) 05/16/2008: Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. The daily closing price reversal up on the daily chart is somewhat positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture.