Silver Report

Market Performance _____ LAST YTD % 3-MTH  6-MTH  9 MTH  1 YR SI 35.955 +15.81% +25.25% +80.17% +93.83% +109.39% GC 1,429.1 +0.28% +2.93% +14.24% +15.98% +27.91% PL 1,802.0 +1.00% +6.90% +15.81% +16.30% +12.93% CT 206.78 +48.54% +59.45% +130.32% +157.83% +166.99%

Because of its role as both an industrial material and an investment vehicle,
Silver continues to be the best performer in the metals complex. Only cotton, because of weather related issues, has posted better returns.
There are a couple of theories floating around that attempt to explain this move.

The "Short Squeeze":

CFTC Bank Participation Reports As you see in these reports, as of 03.01.11

banks were were net short approximately 30,000 silver futures contracts. The option reports shows that banks were holding bearish options positions: short calls and long puts.
The shortsqueeze.com link shows the SLV ETF has a short interest position of 17,631,300 shares.

http://www.google.com/search for silver short squeeze stories

Dwindling Stocks:

COMEX Silver Inventories at a 5 year low

The backwardation structure of the price curve shows how tight silver supplies are.


Market Manipulation:
CFTC Manipulation Investigations


Supply/Demand discussion from Silverseek.com

03.09.11 Review

Economic Indicators

MBA Purchase Applications     

__________________Prior_______Act

Purchase Index - W/W Change	-6.1 %	12.5 %
Refinance Index - W/W Change	-6.5 %	17.2 %
Composite Index - W/W Change	-6.5 %	15.5 %

Wholesale Trade

Inventories - M/M change

Prior 1.0 %

Revised 1.3 %

Act 1.1 %

EIA Petroleum Status Report

Crude Inventories:  Prior-0.4m Bbl Est+1.3m Bbl Act + 2.5m Bbl

Gasoline : Est -1.5m Bbl Act -5.5m Bbl 3^rd drop in a row

Distillate : Est –o.5m Bbl Act -4.0m Bbl 4^th straight draw

EIA Summary (Click Here)

EIA Data (Click Here)

Short-term Energy Outlook

Summary:

EIA expects continued tightening of world oil markets over the next two years

The forecast for total world oil consumption grows by an annual average of 1.6 million bbl/d through 2012.

Projected WTI spot prices rise to an average of $105 per barrel in December 2011 and remain at about that level through 2012.

Market Movers

 RBOB +2.50% Heating Oil +1.84% Natural Gas +1.45%  Crude Oil WTI -0.97%

T-Bond +0.69% 10-Year Note +0.46% 5-Year Note +0.30% 2-Year Note +0.08% 3M ED unch

S Franc +0.64% Can Dollar +0.28% Euro FX +0.02% J Yen -0.07% U.S. Dollar Index -0.10%

DJIA Mini  +0.07% Mini S&P unch Mini Nasdaq 100 -0.50%

Silver +1.32% Gold +0.15% Platinum +0.11% Palladium -0.74% High Grade Copper -3.19%

Coffee +2.66% Sugar #11 -0.91% Cotton #2 -1.32%  Lumber -1.86% Cocoa -2.92%

Corn -0.64% Bean Meal -2.08% Bean Oil -2.33% Beans -2.39% Wheat -2.69%