Compiled 07/08/08 6:00 AM (CT)

Statistics: London Gold Fix $929.25 +$8.25 LME Copper stocks 122,175 tons +100 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) As suggested yesterday, the silver market just wasn't supported off the latest news of strong ongoing investment interest from the ETF sector and it also possible that the silver market won't find much favor from the flow of scheduled US economic reports today. In fact, given the sea of red in a long list of physical commodity prices yesterday it was clear that silver prices were being undermined by deflationary slowing concerns. While some players are concerned that silver failed to sustain above the 100 day moving average at $17.93 over the last two trading sessions, the more critical question for the silver trade today might be the threat of ongoing declines in global equity prices. In other words, even if the scheduled US numbers aren't weak, progressive declines in the US and world equity markets might keep the fear of too much slowing alive in the eyes of many physical commodity markets like silver.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) With the Dollar sitting within the prior day's trading range, the gold and silver markets have little to go on from the currency market action overnight. However, with expectations calling for more US slowing evidence in the scheduled numbers today there is a portion of the currency trade anticipating further weakness in the Dollar directly ahead. However, a sharp slide in oil prices in the prior trading session and some follow through weakness again this morning as well as weakness in a broad cross section of physical commodities in the prior trading session would seem to leave the precious metals markets concerned about more deflationary price action ahead. With several potentially weak US economic readings due out today and the US corporate earnings cycle kicking off today, the trade might logically retain their fear of too much slowing and in the past that type of concern has favored the bear camp.

Technical Analysis:
Note: Compiled during previous session 07/07/2008 at 3:21 PM CBOT SILVER (SEP) 07/08/2008: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. The swing indicator gave a moderately negative reading with the close below the 1st support number.