SILVER

Like gold, the silver market has started out weaker with an initial slide down to the $31.17 level in the May silver contract. Silver did see evidence of rising quarterly silver production from a Russian miner overnight but that news might have been countervailed by a somewhat bullish silver price forecast from Citi Bank. The margin reduction at the end of last week for silver, might be providing some support to silver prices today but with equities starting out higher and expectations for the retail sales report somewhat positive, the bull camp in silver doesn't appear to be fully embracing positive outside market conditions. As in gold, the silver trade isn't easily embracing positive economic views and therefore it isn't surprising to see many physical commodity markets starting out softer this morning. Comex Silver Stocks were 141.594 million ounces up 985,437 ounces. Comex Silver Stocks are now at the highest levels since 08/06/2008. The Commitments of Traders Futures and Options report as of April 10th for Silver showed Non-Commercial traders were net long 21,359 contracts, a decrease of 1,994 contracts. The Commercial traders were net short 30,452 contracts, a decrease of 5,142 contracts. The Non-reportable traders were net long 9,093 contracts, a decrease of 3,148 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 30,452 contracts. This represents a decrease of 5,142 contracts in the net long position held by these traders. The bias is down to start the new trading week as many players are simply unwilling to put a positive spin on overall global macro economic prospects. Many markets want an easing move from either the US or China or they want to see definitively stronger US economic numbers. Unfortunately the economy seems to have lost some momentum and it could take a series of softer than expected readings just to bring the Fed back to the QE3 trough. Therefore we can't rule out periodic declines on the charts and an ultimate retest of levels below $31.00.