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

Statistics: London Gold Fix $864.50 -$18.00 LME Copper stocks 150,875 tons -225 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) Apparently a large build in silver exchange stocks yesterday was reversed overnight but the silver market might need something more than minor supportive news from the supply front to alter the crushing pressure spilling in from key outside market forces this morning. In fact, silver prices in the early going today have already reached down to the lowest level since early January and that clearly gives the bear camp a technical edge. In the current environment, some traders point to a gap area on the charts forged between January 7th and January 8th, but the early action today has basically filled that gap already and that has prompted some traders to suggest that the next key area on the charts sits 19 cents below this morning's early action. Unfortunately for the bull camp, action in the platinum and copper markets is overtly weak this morning and that could add to the initial pressure in the silver market.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) At first blush this morning the outside factors that typically influence metals prices are either slightly bearish, or distinctly bearish. In fact, with the Dollar soaring against a host of currencies and apparently managing the sharp and consistent rise in the face of slowing inside and outside of the US, one gets the sense that the Dollar action is a trend. With oil prices clearly unable to hold the prior session's gains and the strength in the Dollar potentially a major undermine for the crude oil markets again today, it is possible that weakness in the energy markets could turn up the heat on gold and silver prices. Surprisingly suggestions from the ECB President yesterday that the slowing of the Euro zone economy was much more significant than was anticipated and a series of rather lofty financial sector write downs hasn't managed to rekindle flight to quality concerns. With the US expected to release a Productivity reading this morning and the Fed recently praising the productivity performance in the US, it is possible that the scheduled report slate from the US will support the Dollar and favor the bear camp in the gold and silver markets. With the initial weakness in oil prices this morning, gold and silver traders need to watch out for a slide below the recent lows in the September crude oil contract of $117.11 as that could further deflate macro economic concerns and in turn push the Dollar even higher.

Technical Analysis:
Note: Compiled during previous session 08/07/2008 at 3:20 PM CBOT SILVER (SEP) 08/08/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market's close below the 1st swing support number suggests a moderately negative setup for today. The market is approaching oversold levels on an RSI reading under 30.