SILVER

While silver is also showing some signs of strength to start today, the March silver contract remains roughly 63 cents an ounce below last week's high. However, silver does seem to be getting a lift from the partial risk on vibe, that in turn was the result of favorable international equity market action and mostly positive German IFo business index readings. Silver might be drafting some support from positive demand stories from the overnight wires, as there was talk of sustained silver demand from China and a longer term prediction that silver prices will be stronger in 2012. However, silver is clearly entrenched in a physical commodity market status and to continue to claw out short covering gains, silver might need to see something positive from US Housing starts and permits and persistent gains in US equities. The bear camp suggests that March silver will retain a negative technical setup on the charts as long as March silver remains below the even number $30.00 level. However, Comex Silver Stocks were found to have risen to 113.124 million ounces yesterday afternoon, for a noted single day gain of 1,145,253 ounces and Comex Silver Stocks are now at the highest levels in a year. In fact, Comex Silver Stocks are now at the highest levels since 07/08/2010. The bulls want positive US data and the bears are hopeful that Euro zone concerns will soon return to the headlines. Initial support in March silver this morning is seen at $29.12, with more significant support seen down at $28.93. The bulls have the initial edge but that edge would seem to be built on a thin layer of international optimism. Therefore the silver bulls probably need something positive from housing starts and permits in order to propagate the initial gains. In order to foster a fresh layer of stop loss buying today, might require a rise above $29.67.