SILVER

Like gold, the silver market continues to be off balance because of slack global economic views. However, silver is also off balance because of the lingering impact of recent tax changes on Indian precious metals imports and also because of the ongoing Indian Jewelers strike. However, silver did see some bullish analyst price forecasts floated overnight, which predicted as much as $3 to $4 of potential upside in silver prices. At least early in the trade today, the key feature of the silver trade is likely to be the US factory orders release, which is generally expected to post a gain. However, action and direction in US equities will also be a critical focus of the silver trade today. Later in the Tuesday trade the silver market will be in the hunt for something supportive from the FOMC meeting minutes release, as a promise of additional easing from the US Fed, might be enough to countervail fears that US growth remains too anemic to dramatically reduce a stubbornly high unemployment rate. In the end, silver is a classic physical commodity market in need of positive economic news flow. Comex Silver Stocks were placed at 138.597 million ounces yesterday afternoon for a single day gain of 1,524,555 ounces. Comex Silver Stocks are now at the highest levels since 09/15/2008 and silver stocks have increased 14 of the last 20 days. With May silver prices to the highs yesterday, reaching as much as $1.62 an ounce above last week's lows, the silver market should be considered vulnerable to corrective action ahead. We get the sense that the silver bulls need a perfect storm of developments today, just to sustain the recent rise up and away from the $32.00 level in the May silver contract. However, the Fed could bailout the bull camp in silver with a mere hint of easing ahead.