Compiled 05/09/08 6:00 AM (CT)

Statistics: London Gold Fix $887.25 +$15.00 LME Copper stocks 121,275 tons +11,150 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market continues to have a split personality, as strong gold and platinum prices are benefiting the bull camp in silver, while moderately significant weakness in copper prices is providing a countervailing force. In fact, it would seem as if gold has outperformed the silver market on the upside this week, and perhaps that is because gold continues to garner more overall headline coverage. It is also possible that news of steady silver production from two different silver producers has dampened the fundamental view toward silver somewhat. With the July silver contract managing to climb back above the $17.00 level in the early action today, it is possible that silver will pick up some technically orientated follow through buying. However, it should also be noted that copper prices forged another new low for the move again early today and in turn copper prices have reached the lowest level since May 2nd and that could drag on the silver market early today.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) With the oil market persistently making new all times highs on its charts and the US Dollar tracking modestly lower from its recent highs, it would seem like the outside market influences on the precious metals markets are positive at the start of the US trade today. With a US Trade Balance release due out early in the session today, there is the chance of some increased volatility in the Dollar and at least an initial reaction in gold and silver prices, but the trade doesn't seem to think that the Trade balance readings will offer a sustained influence on metals prices. However, it is clear that inflationary expectations are being heavily touted in the headlines and that isn't surprising considering that crude oil prices this week have managed a fresh new all time high in every trading session. On the other hand, traders do need to watch for a surprise in the US Trade Balance report this morning, as the Dollar at the end of last month reached all the way down to the 71.00 level and that spike culminated a rather severe and sharp three month slide in the Dollar which in turn could have given US exports a big boost. In short, the bulls have the initial edge because of the seemingly entrenching downside action in the Dollar and more specifically because of the clearly entrenched upside tilt in oil prices.

Technical Analysis:
Note: Compiled during previous session 05/08/2008 at 3:21 PM CBOT SILVER (MAY) 05/09/2008: Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. The close above the 9-day moving average is a positive short-term indicator for trend. The outside day up is somewhat positive. There could be more upside follow through since the market closed above the 2nd swing resistance.