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OUTSIDE MARKET DEVELOPMENTS: With the outlook for the Greece situation seemingly improved by the latest austerity program and equity market action generally upbeat over the last 24 hours, that seems to have left physical commodities like the metals markets in favor. Apparently many markets have taken hawkish US Fed dialogue, as a sign that the US economy continues to progress toward recovery, even if scheduled data has failed to register much in the way of recovery progress. Therefore it is possible that many markets might simply discount a series of private jobs reports today. The markets will also see a US ISM Non Manufacturing release later this morning and a Fed Beige Book early this afternoon. However, with the US monthly non farm payroll reading due out on Friday morning and one of the private jobs reports this morning showing an improvement it is possible that the bull camp will lessen their concern toward the Friday numbers. As in the prior trading session, the action in the US equity markets look to be a major influence for gold and silver prices.

GOLD MARKET FUNDAMENTALS: In looking at the magnitude of the gains in gold in the prior trading session, one almost got the impression that “investment interest” was returning. Clearly a weaker Dollar and rising equities gave some credence to the prospect of recovery ahead, but in some cases it almost appeared as if hawkish US Fed dialogue was being interpreted as a development that signals a recovery in the US economy. In the end, seeing a rally in gold prices in the face of hawkish Fed dialogue and also seeing strength in the face of mostly slack US scheduled data has to embolden the bull camp and discourage the bear camp. It does appear as if favorable Indian demand patterns have provided some support to gold prices, but many traders think that gold strength is generally coming from outside or bigger picture elements. At least in the early action today, it would appear that calm in the Greek situation will give the bull’s some added confidence, while the bear camp will attempt to play up the prospect of weak jobs news from the US economy. For most of the last two months, the gold market has acted like a physical commodity market and therefore the tight correlation with equities is likely to continue to impact gold prices.

SILVER MARKET FUNDAMENTALS: The Silver market has managed another new high for the move today and in the process it has managed to rise within close proximity to the 100 day moving average of $17.33. Clearly silver appears to be up beat toward the prospect of global growth, in the wake of an improvement in the Greek situation. It almost seems as if silver and other physical commodity markets have taken overtly hawkish dialogue from the US Fed, as a sign that the US economy “must” be improving. In other words, if the Fed is feeling the need to tighten, they must be seeing signs of progression in the US economy. In the short term, weakness in the Dollar and a lack of concern toward the economy looks to favor the silver bulls, while the bear camp will look to potential weakness in upcoming US jobs figures and further debt problems to stem the current rise in silver prices. The bear camp might also be hopeful that US monthly payroll readings on Friday morning will serve their case better than the economic psychology seen in the first three days of this week. In the end, classic supply and demand news in silver is minimal and seemingly unable to unseat the focus on outside market forces.

PLATINUM: Another new high for the move leaves the bull camp with clear control over platinum prices. A weaker Dollar and a pattern of positive spin on the economic outlook looks to add to the upward momentum in platinum. With the added support from a possible platinum strike in Australia, the platinum market is getting both internal and external fundamental support. Next upside targeting in April platinum is seen at $1,584 and again up at $1,594. While we have a gut concern that economic views are overly optimistic, it probably won’t pay to stand in the way of this market in the coming trading session.

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OUTSIDE MARKET DEVELOPMENTS: While the US Dollar remains within striking distance of its recent highs, the Dollar action overnight does not appear to be the primary reason behind the slide in gold and silver prices. Apparently softer than expected US Consumer Confidence readings and the sharp downside push in global equities on Tuesday undermined global recovery views and that in turn has prompted selling in a host of physical commodity markets like gold and silver. It would also not seem like debt concerns in the Euro zone are behind the overnight weakness in the precious metals markets. With a US new home sales report due out later this morning and the outlook for the recovery seemingly downgraded recently the importance of regularly scheduled US data flows looks to have expanded. Some bulls might hope for some support off the US Fed Chairman testimony at mid morning, as the Chairman is expected to reiterate the need to leave US interest rates at low levels for an extended period of time. The markets will also see a second leg of US Treasury auctions around mid session with $42 billion in 5 Year notes being offered for sale.

GOLD MARKET FUNDAMENTALS: There appears to be a general macro economic let down being embraced in gold and other economically sensitive commodity markets. While the Consumer Confidence readings from the US aren’t typically seen as a top tier economic report, the market has apparently taken those readings to heart and it could take something very positive from the new home sales report this morning just to temper the fear of a long slow recovery process. After the early weakness in gold prices today, one could suggest that disappointment over potential Chinese interest for IMF gold supply added into the negative price tilt overnight, but the Chinese have already signaled that current gold price levels were unattractive to them. However, there are press reports overnight suggesting that India might be a buyer for the IMF gold supply and given the size of the IMF gold sale, it would not seem like the physical sale issues are a primary bear force for the gold trade. It would almost seem as if the gold trade is fearful of the US Fed Chairman testimony later today and therefore traders might expect to see some mid morning volatility in gold prices around that testimony. With gold and equities seemingly tightening their relationship recently, gold traders will probably continue to take a large measure of guidance from the US stock market.

SILVER MARKET FUNDAMENTALS: The silver market remains under pressure in the early going today with the silver trade suggesting that broad based physical commodity market weakness was behind the slide in prices yesterday. As in the gold market, silver was disappointed with slack US numbers and also with the sharp declines in US equities. With noted weakness in industrial commodities like copper, the silver market seems to be encountering financial and industrial based selling pressure. Given the drift back a toward classic physical commodity market fundamental focus in silver, that could make the new home sales report and the action in the US equity markets this morning even more critical to the silver trade. The bear camp might even play up a minor trend of builds in daily silver exchange stocks as a negative but in the short term, the concern of slackening demand seems to be more important than minor supply side issues.

PLATINUM: There is no respect for the recovery and that leaves the door open for more liquidation selling in the platinum market. With an early failure back below the $1,500 level this morning, it is clear that some classic technical pressure is set to combine with a poor fundamental picture. However, we would not rule out a respect for support down at $1,489 in the face of Bernanke testimony this morning but only if the new home sales figures manage to stay in positive territory.

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OUTSIDE MARKET DEVELOPMENTS: With the US Dollar only slightly weaker this morning and gold and silver prices showing a very firm bid, it would not seem like the action in the currency markets was the primary catalyst behind the bullish action in the metals markets. With sharply higher equity market trade it is possible that an improvement in macro economic sentiment was providing the bull camp with a lift this morning. Some traders are suggesting that stronger than expected earnings from the UK bank Barclays was the primary force that served to improve overall macro economic sentiment today, while others suggested that the presence of a 30 day grace period for Greece was providing a temporary all clear signal. However, the markets could have been a little disappointed by the weak German ZEW readings overnight, but that information was seemingly overshadowed by the Barclays news and by the expectation of somewhat positive US scheduled data flows later this morning. With the US scheduled to release an Empire State Manufacturing report and a NAHB Housing Index reading and the trade calling for minimally positive readings in both those reports, it is possible that the US Dollar will remain off balance and physical commodities like gold and silver will be supported by today’s data.

GOLD MARKET FUNDAMENTALS: With a definitive range up extension this morning on the charts, the April gold contract has managed to reach the highest level since February 3rd. In addition to an improved macro economic condition this morning, the gold trade seems to be somewhat relieved that the situation in Greece might be put on hold for a full month. The gold market might also have garnered some support from a string of favorable US and UK corporate earnings reports this morning, as that news seems to have reversed the patently bearish economic sentiment that seemed to be settling into the markets last Friday. Surprisingly Indian gold market action overnight was mostly unimpressive and that suggests that improvement in developed country economic sentiment is indeed a major component of the bull case this morning. However, with April gold managing to climb back above the 50 day moving average early this morning, that action has fostered some talk that the gold market might be throwing off the downward bias that has periodically dominated the trade since the early December 2009 top. At least in the early going today, it would appear that favorable equity market action means more to the gold bulls, than minor US Dollar weakness.

SILVER MARKET FUNDAMENTALS: As in the gold market, the silver market bulls appear to be cheered by the idea that Greece has been given a 30 day grace period. It is also likely that favorable UK bank earnings news from Barclays is adding into the positive macro economic tilt this morning in silver. In short, silver appears to be deriving most of its upward action off an improvement in macro economic sentiment and not necessarily from minor declines in the US Dollar. Unlike the gold market, the silver market hasn’t been able to regain its 50 day moving average, which surprisingly sits all the way up at $17.19 in the May silver contract. For the time being, silver appears to be acting like a physical commodity market, that is seeing a modest improvement in overall psychology but it is also possible that distinctly favorable US equity market action will be the key to the silver bull’s near term control over prices. Unfortunately for the bull camp, the silver market was once again presented with news of a rather sharp gain in physical silver production from Pan American silver over the weekend but apparently the silver trade is discounting bearish supply side news in favor of an improvement in overall physical commodity demand expectations.

PLATINUM: Like the rest of the physical commodities, platinum is apparently poised to extend on the upside. With a weaker Dollar and higher equities and perhaps even some favorable US scheduled data flow, we have to think that April platinum is capable of a near term rise back above the $1,550 level. The Commitments of Traders Futures and Options report for platinum showed that as of February 9th, the Non-Commercial and Non-reportable combined traders held a net long position of 22,532 contracts, which represents a decrease of only 100 contracts in their prior net long position. However, with April platinum to this morning’s highs, already sitting as much as $38 an ounce above the level where the COT report was measured, the net spec positioning in platinum is clearly understated.

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OUTSIDE MARKET DEVELOPMENTS: While a number of international equity markets managed to bounce overnight, one doesn’t get the impression that global economic sentiment has actually improved. In fact, the Dollar seems to have remained in favor, in the wake of ongoing fears toward the Greece financial condition. However, the markets did see a rather robust UK house price gain overnight, but that news might have been offset by surprising comments from Trichet, who suggested that the risk of a global depression was underestimated. However, economic sentiment might improve temporarily this morning in the wake of the US 4th quarter GDP reading. In fact, Obama early in the week hinted at an improvement in the US GDP report, but the trade already seems to have baked in a strong US GDP report for this morning.

GOLD MARKET FUNDAMENTALS: While the gold market seems to remain focused on demand prospects, the track of supply side news this week seems to have generally favored the bear camp. Fortunately for the bull camp news of a rise in Chinese gold production this week, was offset by news of a jump in Indian gold imports. However, the gold trade has to be concerned about residual strength in the US Dollar, as the Dollar managed yet another new high for the move early this morning and in the process the Greenback reached the highest level since September 1st. While the trade is generally anticipating a strong US GDP reading this morning, one would have to think that the market has already factored in a large portion of that type of result. The bear camp will point out that April gold remains below the 100 day moving average of $1,088.70 into the opening today, while the bull camp might try to play up the strong leap in UK house prices and a slightly positive early track in the US equity markets. For the gold market to benefit from higher equity prices today might require equities to maintain higher prices all the way into the close today, as rallies in stocks this week have been fleeting events.

SILVER MARKET FUNDAMENTALS: While May silver has managed to recover from the low forged yesterday, the bull camp would seem to have very few themes at its disposal. Clearly silver saw some pressure this week off a growing disappointment in the pace of the US economy, and those views also seem to have been enhanced by a very confusing political environment and by noted declines in US equity prices. Like gold, the silver market also seemed to be partially undermined by the resurgence of concerns toward the Greece situation. Furthermore, silver also seems to have be weighed down by noted weakness this week, in a host of physical commodity markets. In conclusion, the silver bulls appear to need something very positive from the US GDP report this morning, but the question is whether or not macro economic optimism will be sustained after the GDP reading is absorbed. It is also possible that a strong US GDP reading could lift the Dollar further this morning and that could serve to limit the benefit of economic optimism in most physical commodity markets.

PLATINUM: With a partially oversold technical condition and hopes of some positive news from the US economic report front, we have to give the initial edge to the bull camp. Therefore close-in support is seen at $1,500 today and we can’t rule out a rise back to $1,526. However, with a slack economic outlook still generally in place, traders should not shift back into a full bull mood.

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OUTSIDE MARKET DEVELOPMENTS: With the Dollar managing to reach the highest level since early September overnight, it would seem like currency related selling pressure will remain in place for gold and silver prices. The bull camp in the metals complex had to be partially disappointed with the inability to benefit from news of ongoing rather stellar economic strength in the Chinese economy overnight. It also seems as if the metals trade generally remains unconcerned about inflationary prospects. In looking forward, the US will bring forth claims data, Philly Fed manufacturing figures and a Leading indicators report today but those numbers aren’t expected to provide much of a surprise from the economic front. With a host of physical commodities showing a liquidation pattern in the face of the ongoing Dollar gains and that action being accompanied by weakness in global equity prices, the bear camp in the precious metals complex would seem to have the benefit of the doubt.

GOLD MARKET FUNDAMENTALS: While the gold market saw evidence of a rise in gold production from a Russian gold miner, that news would not appear to be the reason for the early weakness in gold today. Clearly persistent gains in the Dollar has tripped up the gold market, with that mentality probably preventing the gold market from garnering support from news of a small Russian gold reserve buy. With the focus so intently on the direction of the US Dollar, the gold market also doesn’t look to benefit from talk that the availability of scrap gold supply in India might be set to dwindle. In other words, the focus on currency issues probably means that classic supply and demand side elements are going to be discounted. With the trade either expecting the Chinese to over tighten, or that the Chinese economy to falter it would seem like the trade is simply ignoring the potential for continued ongoing growth in China and that would seem to highlight the existence of a bearish spin in the gold market. With the US Treasury market showing consistent gains this week, it is also possible that markets like gold are even sensing a decline in flight to quality concerns off the possibility that US government spending efforts might somehow be restrained by a change in political winds.

SILVER MARKET FUNDAMENTALS: Technically, the silver market appears to have violated a series of key points with the overnight slide. In addition to falling below the 50 day moving average again the silver market has also failed to check up at classic retracement levels. Like the gold market, the silver market saw some potentially undermining silver production news from a Russian silver miner overnight but the real culprit behind the slide in silver prices looks to be the rising Dollar. However, the silver bulls have to be really disappointed with their inability to benefit from stellar Chinese economic readings that were released overnight and that is apparently the result of trade ideas that the Chinese government is ready and able to stop inflation before its takes a strong foothold. It is also likely that silver prices are being pulled downward by a general, but somewhat broad based physical commodity market liquidation pattern.

PLATINUM: We have to think that platinum is poised for more corrective action ahead, as the trade was overbought and the outside market forces are clearly favoring the bear camp. The failure to hold the $1,596.30 level, could add to the downward tilt in prices today, especially if the broad based physical commodity liquidation wave continues.

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OUTSIDE MARKET DEVELOPMENTS: The overnight macro economic news wasn’t that significant, as Euro zone economic readings were only marginally upbeat. The trade also saw some slightly hot UK inflation readings overnight, but the metals trade in general didn’t seem to be that interested in inflationary expectations overnight. However, with the US monthly Non farm payroll report looming ahead, it is clear that precious metals and a long list of physical commodity markets are poised for an important reading on the condition of the US recovery. With a very diverse range of estimates for the US Non farm payroll report today, it would appear that portions of the trade will have to be disappointed with the figures. It could be a little dicey for the bull camp in the precious metals today, as a patently strong reading from the US might foster concerns of a soaring Dollar, or even concerns of rising interest rates ahead. On the other hand, a patently weak US Payroll reading might undermine the Dollar, but the question is will the gold and silver trade embrace a weaker Dollar as a positive or fear a return to deflationary conditions.

GOLD MARKET FUNDAMENTALS: In retrospect, the gold market has seen stories from all over the map this week. On one hand, the gold market saw signs that the Chinese were set to tighten credit conditions, but that potentially negative development was at least partially offset by a series of favorable Chinese retail gold demand stories and what appeared to be a very broad based commodity fund buying wave. The February gold contract sits above the 21 day moving average early this morning, which is located down at $1,113.10 today. As usual the trade will probably look to the direction of the Dollar today for guidance on gold prices. Some traders suggest that gold needs a not too hot and not too cold set of figures today, to come away from the reports with a positive track. However, some gold bulls are suggesting that the gold market is capable of de-linking with the Dollar, but that relationship has remained pretty strong lately. The bear camp is suggesting that the rally off the December lows leaves the gold market a bit vulnerable from a technical perspective today and with February gold contract starting the trading session out today right on the 50 day moving average there does appear to be the prospect for a significant technical decision today.

SILVER MARKET FUNDAMENTALS: The March silver contract in the early trade today sits roughly $1.37 an ounce above the late December lows. As in the gold market, the silver trade would seem to be poised to take a large measure of direction from the Dollar in the wake of the US Non farm payroll report this morning. While the gold market sits right on its 50 day moving average this morning, the March silver contract comes into the action today well above its 50 day moving average. Noted weakness in the copper market over the last 36 hours is probably serving as a slight outside market negative to silver prices today, especially since silver at times this week seemed to be attempting to embrace its industrial standing. While there was a modest decline in silver exchange warehouse stocks overnight, the silver market hasn’t recently given that much credence to classic physical supply side developments. The bull camp is suggesting that silver stands a much better chance of de-linking with the Dollar today than the gold market, as silver managed to outperform gold on a number of occasions earlier in the week.

PLATINUM: The platinum market would seem to be suggesting that the numbers are going to serve to lift prices even further. The bull camp might be right, but they seem to be taking a very big risk. Just a correction to this week’s lows would mean a slide of roughly $100 an ounce in April platinum.

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OUTSIDE MARKET DEVELOPMENTS: While the overall gain in the US Dollar this morning isn’t that impressive, seeing the Dollar generally hold within close proximity to its recent highs seems to leave the currency impact on precious metals in the bear camp this morning. With global equity markets moderately weaker overnight and the trade seeing some renewed concern from the US financial sector, gold and silver and a host of physical commodities seem to be facing a negative news bias into the early US Wednesday morning trade. The US will present the metals trade with a New York NAPM Business activity Index, a Chicago PMI reading, a K.C. Fed manufacturing Index and mid day auction results of $32 billion in 7 Year Treasury Notes. Given the initial upward tilt in the US Dollar, the presence of anything favorable from the US scheduled report front this morning might serve to lift the Dollar further and in turn undermine gold and silver prices.

GOLD MARKET FUNDAMENTALS: While the Wall Street Journal article on the prospect of rising gold production costs could be seen as a supportive fundamental development for gold prices, this market just doesn’t appear to be that interested in classic fundamental developments. It also seems as if generally supportive Chinese retail gold demand talk is still being generally discounted by the gold trade, especially in the face of a slight rise in the US Dollar. Some traders are suggesting that talk of another bailout payment to GMAC serves to rekindle financial sector concerns again which have generally been seen as a negative to gold prices since the Dubai credit situation initially surfaced around Thanksgiving. With the trade seemingly anticipating something favorable from the Chicago PMI report this morning, the gold trade might be watching the 78.50 level very closely in the Dollar. Some players are suggesting that the failure to hold above the $1,100 level has given the bear camp a technical edge in the early trade today. With equities weaker and the macro economic outlook seemingly sagging today, the bear camp would seem to have more angles in their favor than the bull camp early in the trade today.

SILVER MARKET FUNDAMENTALS: With the slide below the even number $17.00 level overnight and the 50 day moving average seen close-in down at $16.87 today there would appear to be a number of bearish technical themes present in the early trading action. Clearly a weaker US Dollar and negative leadership from gold prices has given the bear camp in silver some added confidence, especially since the equity market action seems to make the outlook for the economy feel even more suspect. While the silver market seemed to have a somewhat less overbought technical condition than gold in the latest COT positioning reports, the bull camp in silver still seems to be without much fundamental headline support into the Wednesday US trade. The bull camp might point to some positive action in copper prices early this morning, as a possible supportive element, but with the equities down moderately and the silver trade potentially facing lower pre-holiday trading activity ahead, it could be difficult to supplant the long list of the outside market negatives.

PLATINUM: After the rather impressive mid month run up in platinum prices and adjustments to the platinum COT positioning, that would seem to leave platinum extremely vulnerable to more downside action ahead. In fact, with internal platinum fundamental changes mostly non existent recently, the platinum market might be dominated by technical or outside market influences. Near term downside targeting in the April platinum contract is seen down at $1,468.

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OUTSIDE MARKET DEVELOPMENTS: While the precious metals and physical commodity markets could have been cheered by the US Fed’s decision to leave interest rates on hold yesterday, the action in the Dollar seems to have taken center stage. One also gets the feeling that the markets remain fearful of upcoming US rate hikes, while others are suggesting that the failure to tap on the brakes early in the US recovery, is eventually going to allow the recovery to gather a little more momentum. Apparently the currency trade thinks that prospects are brightening, at a faster clip in the US economy and seeing the Fed stay with low rates, would in turn seem to facilitate that argument. As in the equity markets, the Dollar might begin to see favorable US scheduled number flow, as Dollar positive, and until the precious metals markets manage to de-link with the Dollar, that could mean evidence of growth could apply even further pressure to gold and silver prices. With the US scheduled to release initial and ongoing claims, as well as a Leaders and a Philly Fed number this morning there could be enough information out today to test the markets shifting fundamental attitude.

GOLD MARKET FUNDAMENTALS: At least in the near term, the gold market seems to be off balance because of the stellar rise in the Dollar. The bear camp will suggest that a quasi double high up around the $1,142 level is a negative technical signal, while the bull camp might retain some confidence, as long as the February gold contract manages to hold above this week’s consolidation lows of $1,111.70. One might have expected up beat US Fed dialogue on the state of the US economy to be supportive of gold prices yesterday, especially if the on hold stance allows the anemic US recovery to gain more momentum before the Fed taps on the brakes. With slightly weaker global equity prices this morning, it is possible that some classic macro economic type liquidation is being seen in gold in addition to currency related liquidation pressure. Apparently the gold market wasn’t that interested in favorable Indian gold import data released overnight for the first half of December and that in turn highlights the dominance of the Dollar action on gold market sentiment. While the bias appears to be pointing downward in gold this morning, the gold bulls wouldn’t have benefited from US Fed hints at higher rates yesterday. Eventually seeing the Fed remain on hold could be a benefit to the gold bull camp.

SILVER MARKET FUNDAMENTALS: Like the gold market, the March silver contract has also forged a quasi double top on the charts and has fallen back sharply. Clearly the root of the liquidation pressure this morning stems from the ongoing rise in the US Dollar, but it is also possible that weakness in global equities, weakness in copper and even weakness in the energy complex is stoking the bear case into the early Thursday US trade. Since silver avoided the type of historic pricing seen in the gold market over the last several months, it is possible that technical corrective action in silver ahead will be less severe. With silver at times over the last six months, holding back from gains because of its industrial link, it is now possible that favorable US economic numbers ahead might actually serve to provide a measure of support to silver prices. The bear camp is also pointing out the double failure to regain the 50 day moving average earlier this week, while the bull camp is hopeful that consolidation support on the charts down at $17.13 will be able to support this market. While the silver trade hasn’t paid that much attention to the ebb and flow of silver warehouse exchange stocks, the market was presented with a moderately negative rise in silver stocks from yesterday afternoon. On the other hand, since the market doesn’t seem to be paying that much attention to physical supply side developments, it is also possible that the silver trade won’t be able to garner any support from overnight news that Mexican October silver production declined by 5.6% on a year over year basis. Like gold, the silver bulls need to see favorable US numbers ahead to provide an offset the rising Dollar.

PLATINUM: The platinum market also forged a quasi double top on the charts and for the time being a stronger Dollar and weaker equity market trade would seem to give the bear camp the edge. There were some positive platinum demand stories in the press overnight and as we suggested in the gold and silver coverage, a lot worse things could have happened to platinum yesterday than the Fed staying on hold and committing to a quicker US recovery track. In the mean time, we can’t rule out a bit of back and fill down to the $1,431 level.

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OUTSIDE MARKET DEVELOPMENTS: While the Dollar has settled into a slightly lower bias in the early Wednesday trade, the Greenback did manage a fresh but fleeting new high for the move in the overnight action. With slightly higher initial equity market action, it would seem like the concern for Dubai and Greece from the prior trading session have been tamped down a bit. However, it would not seem like the Dubai situation is as stabile as it was at the end of last week. It does seem as if a favorable outlook from Texas Instruments overnight has provided the stock market with a measure of support today, but it is also possible that a US Administration offering to reduce capital gains taxes to small businesses yesterday is also serving to improve macro economic sentiment this morning. Some traders suggested that plans to use TARP funds for a jobs program should have been supportive to gold and silver as that move could increase the deficit and it could also help the economy recover. In the action today, the market will see a US Wholesale Trade report that is expected to show a slight contraction, but that report isn’t expected to be a big driver of gold and silver prices. The markets will also see another US Treasury auction cycle at mid session, but the first leg of the auction didn’t seem to have a pronounced impact on metals prices yesterday morning.

GOLD MARKET FUNDAMENTALS: At least in the early action today, February gold has managed a noted recovery bounce of roughly $17 an ounce off the early lows. While the bulls will suggest that bargain hunting buying is providing some lift to gold prices this morning, it would also seem like the market is getting a minor lift from outside market action and also because of a slightly improved macro economic environment. Perhaps the market is being lifted by Indian predictions of an increase in December Indian gold imports, but in the end, the outlook for gold prices looks to sit with big picture macro economic expectations. In fact, in the wake of renewed Dubai/Greece financial concerns yesterday, it certainly seemed as if gold came under renewed selling pressure and that would seem to link gold and equity prices tightly together again today. Certainly evidence of physical buying by either India or Chinese interests would provide support to gold, but in order to return to bull market status, the market might need a definitive improvement in overall macro economic sentiment that in turn would probably be confirmed by higher equities and a lower US Dollar. It is possible that talk of an exit map from ECB officials overnight is a limiting development for gold, as indirect threats of removing stimulus could be seen as a precursor to tightening action. In the end, gold appears to have become a physical commodity in need of more salient growth expectations.

SILVER MARKET FUNDAMENTALS: Unlike the gold market, the March silver contract managed a fresh new low for the move before rejecting that move. With slightly higher initial equity market action and a modestly lower US Dollar, the outside market forces seem to be favoring the bull camp in silver early today. However, it would seem like the silver market is getting a large measure of support from the higher equity market action this morning and therefore silver traders should monitor that action very closely today. While copper and energy prices are also showing some minor positive trade early in the session today, those moves weren’t definitive enough to confirm a broad based buying interest has returned to the physical commodities. Since silver prices seemed to come under aggressive pressure in the wake of the resurfacing of Dubai credit concerns yesterday, traders should continue to monitor the headlines for anything new on that subject.

PLATINUM: Like silver, platinum also saw a fresh new low for the move overnight but then managed to reject that slide. While we think that platinum is capable of a bounce today, the early equity market gains have to hold and possibly extend to have any hope of sustained gains in platinum in the days ahead. In short, view the gains today as short covering balancing, instead of a signal of a true bottom.

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OUTSIDE MARKET DEVELOPMENTS: In retrospect, the bull camp in precious metals markets have to be somewhat disappointed in the lack of flight to quality buying interest last week in the face of a possible revival of financial sector concerns. Apparently the precious metals markets and a host of other physical commodity markets were undermined by renewed slowing concerns and to a lesser degree by renewed strength in the US Dollar. With global equities somewhat lower early this morning and a portion of the trade anticipating slightly slack US economic readings later this morning it would seem like the outside market forces are initially favoring the bear camp. However, the trade did see a rise in the Euro zone CPI readings overnight and that was certainly a change of pace that could have provided some support to gold and silver prices. In looking ahead, the metals trade will see a very active slate of US economic data this week, with a potentially ultra critical US monthly payroll result due in at the end of the week. Into the early action today, slack equities, a weaker Dollar and the prospect of weak US economic readings might mean that the bear camp in precious metals market will have a slight edge.

GOLD MARKET FUNDAMENTALS: While the bull camp is suggesting that the recent correction might bring in some fresh bargain hunting buying into gold, the fear of global slowing still seems to be weighing on a number of commodity markets in the early going today. In fact, the world seems to remain concerned about spillover slowing concerns from the Dubai situation and in the mean time, gold prices seem to have re-established a tight positive correlation with the equity markets. Perhaps the gold market is being supported by talk that the recent correction inspired some Indian retail gold buying or perhaps prices are being supported by talk that a correction in gold prices could bring the Chinese central bank off the bench for additional gold purchases. In the near term, a portion of the trade seems to fear a series of slack US economic readings this morning, while another portion of the gold trade seems to remain fearful of a chain reaction melt down off the Dubai situation. With a record low UK consumer credit reading overnight and another sharp decline in Japanese car output also seen overnight, a number of markets are being confronted with classic slowing signs again and therefore the action in the US equity markets later today could be seen as an extremely critical swing factor for gold prices.

SILVER MARKET FUNDAMENTALS: Like a host of other physical commodity markets, the silver trade remains concerned about the threat of renewed slowing in the wake of the Dubai debt standstill request last week. With silver prices starting out lower this morning, in the face of a weaker US Dollar, it would seem like the silver trade needs even more assurances that the Dubai debt situation is ultimately going to be contained. We doubt that news of increased silver production from a Canadian silver mining company is adding to the downside pressure in silver prices this morning, as silver and gold both look to be intently focused on big picture macro economic conditions. It would seem like silver is tracking tightly with the gold and equity markets, with the action in the Dollar this morning somewhat seen as a secondary consideration. In the end, the silver market does appear to be under some pressure from its physical commodity market standing and that in turn might suggest that equities, instead of the Dollar, might be the most important outside market force in the Monday silver trade.

PLATINUM: Residual weakness in platinum this morning in the wake of a weaker Dollar highlights the current physical commodity market standing of platinum. We see critical consolidation support at $1,440, but we have to give the bear camp an edge early this week. It goes without saying that the platinum market was seriously over wound into the high last week and therefore a correction back down to $1,426 in the January platinum contract at some point this week, wouldn’t be that surprising.