SILVER

Unlike gold, March silver remains significantly below its 200 day moving average this morning. Furthermore, while gold managed another higher high overnight, March silver wasn't able to forge a fresh upside breakout this morning. At least in the early action today, March silver seemed to be lagging behind gold, with silver barely managing to sustain a positive trade. At least to start today, there doesn't appear to be a definitive "risk-on" vibe in place again and there also isn't a definitive upward thrust in equity prices and that might leave silver without a distinct bias. In fact, initial weakness in equities and somewhat adverse initial currency market action might give the bear camp the advantage of the headlines to start the Wednesday US trade. With little in the way of scheduled US data due out later today, action in equities and dialogue from the US Fed might be the main driving forces for silver prices throughout the session today. Comex Silver Stocks were put 123.663 million ounces yesterday for another large daily gain of 1,775,736 ounces. Comex Silver Stocks are now at the highest levels in a year and they are at the highest levels since 03/31/2009. Silver stocks have increased in 15 of the last 20 days. The silver market has started out on a slightly weaker bias and it would appear that prices became somewhat overbought into the highs yesterday. The inability to sustain above the $30.00 level might be a little disappointing to the bull camp and we come away from the action this week with the opinion that silver needs very positive overall macro economic conditions to thrive and in turn follow gold upward on the charts. While gold at times seems to benefit from higher oil and geopolitical anxiety from the Middle East, silver continues to show signs that it remains a classic physical commodity market. Pushed into the market, the bear camp would appear to have a minor edge, with near term downside targeting seen close-in at $29.65 and then again down at $29.49.