Compiled 09/04/08 6:00 AM (CT)

Statistics: London Gold Fix $810.50 +$15.00 LME Copper stocks 182,100 tons +1,575 tons

SILVER MARKET FUNDAMENTALS: (6:00 AM CT) While some players might suggest that a new but isolated silver mining tax decision by the Kazakh government could adversely impact silver production in that country in the future that issue is probably an insignificant development in the silver market's current psychology. In fact, the silver market looks to remain heavily dependant on the direction of the Dollar and the leadership of the gold market. However, the trade is hopeful that a temporary correction in the Dollar might be seen and that the recent lows win silver prices ill serve as some form of technical support for prices. On the other hand, recent strength in the US Dollar appears to be part of an ongoing trend and therefore another portion of the silver trade remains fearful of the action in the Dollar.

OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CT) While the Dollar is technically higher in the early going today, the currency trade has noted that the Dollar failed to sustain a new high in the prior trading session in the face of better than expected US economic readings and ongoing weakness in oil prices. With the Dollar also facing what could be a very critical monthly payroll report on Friday morning, it is possible that some Dollar bulls are set to shy away from the long side of the Greenback because of the potential volatility in the marketplace in the wake of that report Friday. It also seems like the Dollar is being undermined by the expectation that several central banks this week will leave interest rates unchanged. In short, the precious metals markets are seeing what could be a temporary respite from the unrelenting up trend pattern in the Dollar. While oil prices are showing initial strength this morning, the market will be presented with weekly inventory readings today and with some expectations calling for another decline in US gasoline inventories, that news could provide some support to metals prices. On the other hand, the US economic report slate this morning is rather active, with a series of second and third tier readings, the most of important of which might be the ongoing claims. It is also possible that the market will be impacted by the ISM Non manufacturing readings, but with the payroll readings due out on Friday morning, the real Dollar and precious metals market reaction off the economic question, might be delayed and then compounded on Friday morning.

Technical Analysis:
Note: Compiled during previous session 09/03/2008 at 3:20 PM CBOT SILVER (DEC) 09/04/2008: A crossover down in the daily stochastics is a bearish signal. Momentum studies are declining, but have fallen to oversold levels. The market's close below the 9-day moving average is an indication the short-term trend remains negative. It is a slightly negative indicator that the close was lower than the pivot swing number. Some caution in pressing the downside is warranted with the RSI under 30.