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OUTSIDE MARKET DEVELOPMENTS: With international equity markets extending the recovery action seen in the US equity markets yesterday afternoon and mostly favorable economic news seen again overnight, it would seem like most physical commodity markets are benefiting from favorable bids into the early US Friday action. However, the Dollar wasn’t definitively lower in response to the ongoing strength in equities and that might temper some of the overall bullishness for gold and silver prices in the early going today. On the other hand, several US equity market measures seem to be poised to challenge highs for the year later today and with the trade generally expecting favorable US economic data flows this morning, the bull camp in precious metals seems to have more outside market information in its corner than the bear camp. While the trade generally expects to see favorable Personal Spending and Income readings, that potentially positive flow of economic news might be countervailed in the event that US inflation readings this morning are somewhat soft.
SILVER MARKET FUNDAMENTALS: While many traders will suggest that a pattern of declines in silver exchange stocks this week is largely unimportant, that news does seem to dovetail with a generally favorable economic environment. The bull camp might also point to the initial move to the highest levels since August 17th in December silver today as a positive indication for the trade later today. However, the silver bulls are probably somewhat discouraged by minor initial gains in the US Dollar this morning. Another issue that could undermine the silver bulls in the early going today is the news of a decline in silver holdings at a noted silver ETF. Like the gold market, the silver market seems to be behaving like a classic physical commodity, which has recently seen mostly favorable economic information. In the end, silver prices have seemingly tightened their positive correlation with the equity markets.
