Morning Silver Market Report 9/07

Compiled 09/07/12 6:00 AM (CT)

Statistics: London Gold Fix $1,696.00 -5.00 LME Copper Stocks 216,050 tons +2,725 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Silver was lower overnight as traders were cautious ahead of this morning's monthly jobs report. The market had rallied sharply yesterday off of optimism from the Euro-zone but traded back off its highs on stronger than expected ADP payrolls data and an improvement in weekly jobless claims.

The market is counting on the Fed stepping in with a quantitative easing plan, and any improvements in US economic data are seen as threats to such a move. Still, the Fed's statements recently have suggested that it will need consistent improvements in the economic data to alter its course. A strong economy could lend strength to silver as it improves the industrial demand outlook, but these days the market seems to be finding most of its strength from its roll as a precious metal. China announced plans for boosting infrastructure spending, which is supportive from a commodity-demand perspective. The dollar index fell to its lowest level since May overnight, which lends underlying support to silver.

A strong jobs number could spark a setback, but it could be short lived. A weak number could set the market off on another run higher.

Comex Silver Stocks came in at 140.815 million ounces down 189,733.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Asian equity markets were sharply higher during overnight trading, with the Nikkei up 2.20% and the Shanghai A Share index up 3.70%. European stock markets have posted moderate gains this morning, with Italian equities up by more than 2%. US stock indices are higher, while the Dollar is posting moderate losses. China approved plans for spending 1 trillion Yuan to improve its infrastructure. German Industrial Production during July was up 1.3%, higher than market expectations. UK Industrial Production during July was up 2.9%, also higher than market forecasts.

US economic data this morning includes August Non-Farm Payrolls, August Private Payrolls, and the August Unemployment Rate.

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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.