Morning Silver Market Report 02/04

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February 5, 2013 4:40 AM EST

Compiled 02/04/13 6:00 AM (CT)

Statistics: London Gold Fix $1,664.25, -$0.75 LME Copper Stocks 374,200 tons -1,800tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Silver has also started the new trading week out on a softer track on the charts but silver prices are sitting much higher in the recent trading range than the gold market. Silver might have been undermined by news of a build in the speculative long positioning in last week's COT readings. Unfortunately silver isn't tracking with platinum prices this morning which are clearly diverging with the rest of the metals complex in the early Monday US trade action. Silver should continue to derive some support from news released at the end of last week that US silver coin sales were up sharply last month and in the process silver coin sales from the US Mint posted a record sales reading. Comex Silver Stocks were 157.128 million ounces up 2,550,787 ounces and that might be responsible for some of the profit taking selling this morning. Comex Silver Stocks are now at the highest levels in a year, with stocks reaching up to the highest levels since 08/15/1997. The Commitments of Traders Futures and Options report as of January 29th for Silver showed Non-Commercial traders were net long 36,921 contracts, an increase of 2,971 contracts. The Commercial traders were net short 52,951 contracts, an increase of 1,923 contracts. The Non-reportable traders were net long 16,030 contracts, a decrease of 1,049 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 52,951 contracts. This represents an increase of 1,922 contracts in the net long position held by these traders.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Shares in Hong Kong were off slightly overnight, while mainland Chinese shares clawed out minor gains. European shares were higher overnight reportedly off catch up to Wall Street gains at the end of last week. The US markets were mostly mixed in the early going today as some investors catch their breath after last week's stellar pattern of gains. The markets will be presented with a US Factory Orders report today and a regional ISM business index reading, but after last week's US Non farm payroll results, data from the US might be given less attention. Weakness in some Euro zone Producer Prices overnight might serve to pressure the Euro in the early going today, but the metals markets in general might be looking for fresh direction from the Factory Orders report.

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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.

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