SILVER

Silver looks to start higher today but the magnitude of the gains in silver seems to be lagging behind the gains seen in the gold market. Some traders are suggesting that an increase in Indian silver import duties served to hold back silver, while others point to yet another large single day build in exchange silver stocks as potential limiting forces for silver prices. However, seeing a 90 cent plus initial pulse up move in silver prices isn't insignificant, especially since a number of physical commodity markets are showing initial strength today. Like gold, silver is at least partially cheered by Chinese data overnight, which fostered ideas that the PBOC would cut bank reserve requirements. Chinese data overnight also wasn't weak enough to rekindle fears of a hard landing in the Chinese economy. Comex Silver Stocks were 125.980 million ounces up 1,211,764 ounces. Comex Silver Stocks are at the highest levels in a year. Comex Silver Stocks are at the highest levels since 01/15/2009. Stocks have increased 15 of the last 20 days. The Commitments of Traders Futures and Options report as of January 10th for Silver showed Non-Commercial traders were net long 14,538 contracts, an increase of 977 contracts. The Commercial traders were net short 23,323 contracts, an increase of 2,800 contracts. The Non-reportable traders were net long 8,785 contracts, an increase of 1,823 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 23,323 contracts. This represents an increase of 2,800 contracts in the net long position held by these traders. While silver has forged a noted range up extension to start this morning, the March silver contract wasn't able to forge a technical upside breakout on the charts. However, given the risk on vibe and the wave of buying seen in other commodity markets this morning, it is possible that March silver prices will attempt to retest last week's highs at $30.67. Initial support looks to move up to $30.33 today and there might not be much in the way of resistance seen until $31.00.