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OUTSIDE MARKET DEVELOPMENTS: With the world seemingly embracing a recessionary view again, the Dollar higher and energy prices under moderate pressure, the outside markets look set to start the week out in a negative posture for the precious metals markets. In fact, with the Dollar forging a range up extension into the US opening today and crude oil prices down by almost $3.00 a barrel, the fear of too much slowing is seemingly set to dominate a number of physical commodity markets. Even the recovery currencies (Pound & Canadian) are under aggressive pressure in the early action today and that would seem to leave the bear camp in the metals with both the macro economic and currency market edge. However, the trade does appear to be expecting a minor up tick in the US ISM Non Manufacturing Index report this morning, but with the reading expected to come in well under the critical 50 pivot point level, it is unlikely that the fear of slowing, that is apparently being embraced in the world equity markets, will be thrown off as a result of the US scheduled report flow today.
SILVER MARKET FUNDAMENTALS: The silver market looks to be under pressure in the early going today because of weakness in gold, strength in the US Dollar and because of noted weakness in a long list of physical commodity prices. Clearly disappointment over the global recovery track in the wake of the slack US employment report from last week is responsible for a portion of the selling this morning and therefore the US ISM Non Manufacturing report this morning will be seen as an important event. Like gold, silver is expected to see some lost demand, due to a proposed change in an Indian import tax, but the bull camp might suggest that silver hasn’t been that interested in classic demand side developments lately. However, the silver market is seeing a much stronger US Dollar and overt weakness in both copper and crude oil prices overnight and that might be difficult to discount. Like a number of commodities, the silver market looks to take a good bit of guidance from the direction of equity prices, as equity prices look to be a good barometer of the global economic outlook.
