OUTSIDE MARKET DEVELOPMENTS: While the Dollar is lower, equity prices are higher and even energy prices are firmer, and they don’t seem to be favoring the bull camp in the gold market. Furthermore, it would seem like gold is slightly disappointed in the prospect of a US Treasury financial plan announcement, and that in turn would seem to suggest that the flight-to-quality metal gold is set to diverge with the quasi-industrial metals like silver, platinum and copper. While the silver market could have tracked tightly with gold this morning, it was able to generally favor positive ground in the early going, and that seems to leave it tracking the industrial or physical commodity market angles. Fortunately for those physical/industrial metals bulls, the overall market is seeing initial economic optimism off the anticipation of “the plan,” as the scheduled US economic data this morning might have been expected to undermine a host of physical commodity markets. In the end, optimism or quasi-euphoria that the US plan is finally going to be revealed today seems to have provided a distraction from the generally discouraging macroeconomic track.
SILVER MARKET FUNDAMENTALS: At first blush one might think that news of a strike in Peru was serving to lift silver prices this morning. However, silver also seems to be higher in conjunction with platinum and copper prices. In fact, some traders would probably suggest that silver is somewhat higher this morning because of the strength in global equity markets and the thinking that a better economic outlook in the wake of the impending US financial plan release is a situation that will serve to lift a host of physical commodities. In other words, the silver market looks to be playing the commodity card today and not the flight to quality card. While the threat against supply is visible, one could argue that the overall impact of that threat isn’t overwhelmingly bullish. In fact, with a rise in silver exchange stocks at the end of last week, one could also suggest that the supply side story this morning isn’t totally supportive. However, with grain, energy and industrial metals prices showing early gains and the US Dollar down, the silver bulls seem to have a number of outside markets working to their advantage early today.