SILVER

The May silver contract has started out slightly softer this morning perhaps because of a somewhat bearish article on silver that was released over the weekend in the US press. With the press on silver playing up the rise in silver exchange stocks and highlighting the silver market's potential for price volatility, it could take a definitive hope for more US easing directly ahead just to lift silver prices out of a pattern of lower highs on the charts. At the end of last week Comex Silver Stocks were put at 141.869 million ounces for a rather large single day gain of 1,221,283 ounces. Comex Silver Stocks are now at the highest levels since 08/06/2008. Against a back drop of fresh slowing fears and lingering Euro zone debt fears, the reaction to US scheduled data this morning will be very important. Toward the end of last week, silver was at times benefiting from weaker US data and that theory will be put to test early in the US Monday trade action. The Commitments of Traders Futures and Options report as of April 24th for Silver showed Non-Commercial traders were net long 18,546 contracts, a decrease of 2,763 contracts. The Commercial traders were net short 25,169 contracts, a decrease of 5,017 contracts. The Non-reportable traders were net long 6,623 contracts, a decrease of 2,253 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 25,169 contracts. This represents a decrease of 5,016 contracts in the net long position held by these traders. A slightly weaker bias to start but we see the May silver contract respecting support down at $31.10. In order to throw off a pattern of lower highs on the charts, the May silver contract will have to close back above $31.90 today to alter the down trend pattern. That down trend channel resistance line falls to $31.83 on Tuesday. However, to check up the bear's fundamental control, May silver will have to manage a bounce in the wake of soft scheduled US data this morning. In other words, the bull camp has to be saved by hopes of easing and without that benefit, May silver might fail and forge a quick return down to $30.88.