OUTSIDE MARKET DEVELOPMENTS: It would seem like the outlook for the global economy remains upbeat into the action today, as global stock prices overnight generally added to the recovery effort seen in the US markets on Thursday. In fact, the markets seem to be poised to discount a widely anticipated 1.5% decline in the US 2nd quarter GDP reading. While the US GDP reading will be a major focal point of the gold and silver trade this morning, the markets will also be watching the overall direction of the stock market. While Chevron (a Dow component stock) is scheduled to report earnings before the US stock market opening today, many traders doubt that the markets are going to take that much direction from the Chevron earnings. The trade will also see some potentially important news from a couple regional NAPM reports and from a US employment cost Index reading. At least in the early action this morning, it seems as if the US equity markets are set to come into the Friday trade with a ongoing favorable view on the economy and that in turn could mitigate the impact of the anticipated decline in the US GDP report.
SILVER MARKET FUNDAMENTALS: The September silver contract comes into the early action today sitting roughly 44 cents above this week’s lows and in a slightly positive bias. Clearly the silver market has taken a lot of direction from the equity markets this week and that focus might be expected to remain in place today. In fact, the silver market doesn’t seem to be that interested in more evidence of strong production from Silver Wheaton overnight. In fact, the record production readings from Silver Wheaton overnight were the second record production tally seen in the silver market within the last week. However, the silver market hasn’t paid that much attention to physical supply side news lately, with the market seemingly locked onto the prospect of ongoing investment demand. Investment demand in turn is seemingly locked onto the prospects of recovery and that should make the US GDP reading this morning an important release for the silver trade.