We saw divergence yesterday between stocks and precious metals – with the former struggling as a result of more euro fears, while the latter rallied higher; the gold and silver selling at the end of last week once again tempting bargain hunters into precious metals. The US dollar also gained as a result of “safe haven” bids – with the EURUSD dropping to a low of $1.247 before recovering. The Dollar Index gained 0.29% to settle at 82.50. PIIGS debt again sold off following Spain’s formal request for a bank bailout, with strong bids for German Bunds, US Treasuries, and to a lesser extent UK gilts.

Today is expiration day for Comex silver options, which might have had something to do with the weakness seen in silver at the end of last week. However, there were strong bids for the “poor man’s gold” yesterday afternoon which took the price up by around 75 cents in a matter of minutes. This has lifted silver away from its dangerzone around $26, and confirms the decent buying support that exists for silver below $27.

Trader Dan highlights the correlation between the Continuous Commodity Index (CCI) and the silver price. Silver’s industrial component has been acting as a drag on the price in recent months (given the generally weak business sentiment). Silver is also much more reactive to inflation expectations than gold. Given that inflation has been trending sideways to lower in major economies this year, again, it’s not so surprising that silver hasn’t regained the kind of upward momentum we saw during late 2010/early 2011, when the Fed’s QE2 programme was raising inflation expectations and pushing hot money into commodities.

Changing tack slightly, and as part of the run-up the Thursday and Friday’s crucial European Council meeting, BNP Paribas has put together the ingenious chart below showing eurozone leaders’ policy preferences for tackling the continent’s debt crisis. The common ground is easily spotted.