Compiled 05/15/08 6:00 AM (CT)

Statistics: London Gold Fix $866.25 +$1.25 LME Copper stocks 120,850 tons -575 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) While the silver market has consistently discounted and at times ignored evidence of rising silver supply, the silver market has been presented with a series of potentially bearish supply side items this week. In addition to overnight news that Pan American silver reported its best quarter in company history (with higher sales and a production increase of just under 1 million ounces) the market has also seen evidence of rising overall US silver production and signs of increased silver output from beyond the US and Canada. However, the silver market continues to focus on the direction of gold prices and the Dollar and at times it seems to take guidance from oil, platinum and copper. Like gold, the silver markets is at least partially expecting some minor early support from a weaker Dollar, in the wake of a heavy US economic report flow, but seeing weak numbers without seeing a weaker US Dollar could also be disappointing to the bull camp today.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) With the Euro zone GDP reading overnight coming in at +0.7% that barely surpasses the 1st quarter reading seen from the US and that in turn seemed to give the Euro a slight lift against the Dollar this morning. In fact, in looking at the Euro zone data overnight it was clear that the German economy really contributed to the growth in the Euro zone and that hints at resiliency in certain sectors of the Euro zone economy. With the US scheduled report flow today extremely active and many of the expectations calling for soft readings, it is possible that the recent uptrend bias in the Dollar could be called into question. With the Dollar initially lower and the Euro providing some basis for early strength, the gold and silver markets might not be presented with as much of a threat from the currency front today. However, since expectations call for weak US numbers, traders should not underestimate the impact of better than expected US readings. On the other hand, energy prices have generally forged a consolidation pattern this week (despite the fact that they also made more new highs) and therefore many traders are watching for some sort of failure in that market and that could provide a fresh outside market negative for precious metals prices. In the end, the outside market influences for the metals markets are mostly positive in the early going with the Dollar weaker and Oil prices firmer.

Technical Analysis:
Note: Compiled during previous session 05/14/2008 at 3:21 PM CBOT SILVER (JUL) 05/15/2008: Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market tilt is slightly negative with the close under the pivot.