Compiled 12/02/08 6:00 AM (CT)

Statistics: London Gold Fix $772.50 -$23.00 LME Copper stocks 293,025 tons +1,825 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) The silver market might have reached a short term oversold condition in the prior trading session. In fact, with the overnight fresh low for the move putting the March silver contract as much as $1.57 an ounce below the late November high the oversold technical condition might have been extended even further. Therefore, a slight overnight bounce in the US equity market seems to have emboldened some bargain hunting buying in the early US silver action today but it is also possible that news of a merger/buyout in the silver mining sector, combined with another daily decline in silver exchange stocks has left the bull camp with a slight fundamental edge. As in the gold market, the silver bulls might be fortunate that the US economic report slate is relatively inactive until mid session today, as the scheduled data recently seems to have fomented renewed deflationary concerns in a host of physical commodities. For the time being, the silver market seems to be giving more credence to the action in the equity markets, than it does to the action in the currency markets.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) While the US Dollar is higher initially today and international gold market action overnight was somewhat soft, seeing a bounce in global equity prices this morning seems to have moderated the entrenched bearishness toward gold and silver into the US opening. With the ultra weak US equity market action on Monday seemingly turning up the liquidation pressure on the precious metals markets, it is possible that the action in the equity markets today will trump the action in the Dollar in the early metals trade this morning. The US economic report slate today is somewhat thin early, with the only significant market moving events coming in the form of a US Treasury Secretary speech and some mid day US auto sales figures. The metals markets might also have benefited from an Australian interest rate cut overnight and the prospect for an EU economic plan later in the week. It is also possible that the metals markets are looking ahead to the prospect of another aggressive UK rate cut later this week.