SILVER

While silver hasn't forged as impressive of a rise as gold prices this week, March silver has managed an upside breakout and will see the highest price level since December 14th in the early Thursday US trade action. Silver might have been boosted overnight by news that China was undertaking moves that should make it easier for Chinese players to gain access to silver trading. Silver was also lifted from ideas that recent inflation readings from China could allow the PBOC some latitude with respect to monetary policy. However, the primary driving force for silver and physical commodity markets this morning appears to be the fact that European auctions were carried out favorably and that for the time being tamps down concerns for the Euro zone crisis. The silver trade will probably take some type of direction from a flurry of US scheduled data later today, especially if the data depicts forward motion in the US economy. At least to start today, silver is probably destined to catch a slight additional lift from positive US equity market action. On a bearish note, Comex Silver Stocks yesterday afternoon climbed to 123.925 million ounces for another gain of 275,303 ounces. Comex Silver Stocks are now at the highest levels since 03/31/2009. Silver stocks have increased in 15 of the last 20 days. The bias is up to start and there is the appearance of a return to a full risk on environment and that should give the bull camp a definitive edge to start today. Initial support moves up to $30.31 and there might be little in the way of resistance until the $31.07 level. In order to definitively extend the upward track in silver prices this morning, probably requires a clean sweep of positive US data and a further upward extension in US equities. There is the potential to see a trade back above $32 before there is a trade back below $29.50.