Compiled 05/08/08 6:00 AM (CT)

Statistics: London Gold Fix $872.25 -$1.75 LME Copper stocks 110,125 tons +1,100 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Apparently the silver market was unable to fashion recent Gold Fields Mineral Services fabrication demand growth into much of a positive for silver prices. However, the GFMS report yesterday morning also predicted an increase in silver mine production and higher government sales of silver and that probably offset the somewhat supportive minor rise in silver fabrication demand. On the other hand, silver has recently been unable to get out from under the control of a strengthening US Dollar trend and with the Dollar managing another pulse up trade overnight, it would seem like the currency market headlines are still dominating the silver trade. With a significant downside breakout in copper prices this morning, it is also possible that silver will see an additional drag from its industrial metals roots.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Apparently the slide in the US stock market yesterday afternoon served to undermine gold and silver prices, with the gold market falling from a morning high of $873.5, down to a late low of $866.5. Apparently the metals markets were unable to garner support from news of a huge jump in US Consumer Credit and surprisingly the metals weren't able to garner any support from the latest record jump up in crude oil prices. In short, the gold and silver trade seems to be singularly focused on the action in the Dollar but it is also possible that the metals markets were also seeing some pressure from a slight resurgence of US financial sector concerns. While one would think that a resurgence of financial sector concerns would benefit gold and silver prices, the trade just hasn't been able to return on the flight to quality angle lately. With the US schedule today producing a series of initial claims readings and a wholesale trade report, there could be an initial price reaction to the Dollar early in the trade, but some traders may view EU and UK rate decisions this morning, as the primary developments of the trading session.

Technical Analysis:
Note: Compiled during previous session 05/07/2008 at 3:21 PM CBOT SILVER (MAY) 05/08/2008: The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. The market's close above the 9-day moving average suggests the short-term trend remains positive. The gap lower price action on the day session chart is a bearish indicator for trend. The close below the 2nd swing support number puts the market on the defensive.