SILVER

With a noted range up effort early today, March silver has managed to reach the highest price level since December 21st. The trade seems to be divided on the actual source of the sharply higher action, with some traders pointing to favorable currency market action and others suggesting that the gains are primarily because of the return of a risk on mentality. Others think that gold and silver are drafting positively off more gains in energy prices, while others think that silver is gaining ground because of hope that the US Fed and the PBOC are generally poised to provide assistance to the global economy. Silver is probably drawing some support from news that India might be set to allow more banks to import silver, but allowing more import avenues isn't necessarily a sign of increased Indian silver demand down the road. In the end, there does appear to be a risk on vibe in place and a stronger Euro to start, probably gives the bull camp in silver added confidence. While silver might be garnering some support from higher energy prices, it remains to be seen if oil prices are rising because of geopolitical uncertainty, or simply because of generally upbeat global macro economic psychology. Comex Silver Stocks were 121.888 million ounces down 414,993 ounces. Silver stocks have increased in 15 of the last 20 days. The silver bulls have the early edge but one does have to give some credence to suggestions that March silver is a bit short term overdone with the magnitude of the initial pulse up move. Significant resistance in March silver is now seen up at $30.20 and critical support probably moves up to $29.75. At least for the morning trade, the bull camp looks to have momentum and outside market action working in its favor!