Compiled 07/25/08 6:00 AM (CT)

Statistics: London Gold Fix $932.25 +$5.00 LME Copper stocks 133,475 tons +2,600 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) After seeing periodic weakness this week in silver prices in the face of sharp declines in copper and platinum prices, one might have assumed that silver was vulnerable to even more losses off further evidence of US slowing. However, it would seem like the fear of US slowing has reached a level that has in turn prompted some flight to quality buying of gold and silver. Certainly slightly weaker US Dollar action and a minor bounce in oil prices benefits the bull camp in silver today, but the real source of the buying appears to be associated with a return of broad based macro economic anxiety. On the other hand, seeing silver rise on evidence of slowing can be a double edged sword, especially in the event that the slowing fails to cause a financial market meltdown. However, with the silver market seemingly being lifted by renewed US housing sector concerns and the US scheduled to release a new home sales reading later today, there would seem to be more evidence supporting the bull case than the bear case in the early going today. As in the gold market, the silver market looks to maintain an inverse relationship with the US equity market and with the US Dollar.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) Clearly the overnight trade in gold was benefiting from mostly favorable outside market action. Certainly one can't suggest that weakness in the Dollar, strength in oil and uncertainty toward the US economy has resulted in a full return to a flight to quality mode, but one could suggest that macro economic anxiety seems to be on the rise again. In addition to the disappointing US existing home sales figures, the much biggest than expected loss at Ford and the a slight bounce in oil prices overnight, the metals markets might also be benefiting from the latest sharp jump up in US home foreclosures. In fact, with the weakness in US existing home sales figures and the foreclosure news overnight, that should make the focus on the US new home sales figures this morning very intense. With the US Durable goods readings also due out today there will be no shortage of fundamental information on the US economy in the trading session today. With the UK also posting some weak numbers in a 2nd quarter GDP reading overnight, one gets the sense that most markets are anticipating more evidence of slowing.

Technical Analysis:
Note: Compiled during previous session 07/24/2008 at 3:20 PM CBOT SILVER (SEP) 07/25/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The daily closing price reversal up is a positive indicator that could support higher prices. It is a slightly negative indicator that the close was under the swing pivot.