Silver Weekly Fundamental Analysis July 16-20, 2012, Forecast

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Introduction: Silver futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of silver (eg. 30000 grams) at a predetermined price on a future delivery date.

Some Facts about Silver

Silver is a soft, shiny and heavy metallic element with a brilliant white luster. A very ductile and malleable metal, its thermal and electrical conductivity is the highest of all known metals.

Besides being used as a store of value, other main uses of silver include applications in areas such as electronics, photography and as antiseptics.

Consumers and producers of silver can manage silver price risk by purchasing and selling silver futures. Silver producers can employ a short hedge to lock in a selling price for the silver they produce while businesses that require silver can utilize a long hedge to secure a purchase price for the commodity they need.

Silver futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable silver price movement. Speculators buy silver futures when they believe that silver prices will go up. Conversely, they will sell silver futures when they think that silver prices will fall.

Weekly Analysis and Recommendations:

Silver is closing the week higher at current 27.28. This week was the 5th weekly session in the past 2 years to bounce off the $26 handle. Silver just seems to find good buying interest whenever we test these lower levels. We see 26.10 as the last line of support before liquidation selling emerges. The metal has been weak for the past 5 months having fallen from 37.46 since February. We would expect stop loss buying of Silver on a move above last week’s high of 28.44. The Gold Silver ratio at current 58.11 continues to trade within a 5 month bullish channel. Parameters lie at 56.92 and 59.92.

Date

Last

Open

High

Low

Change %

Jul 13, 2012

27.283

27.115

27.545

27.063

0.66%

Jul 12, 2012

27.105

27.103

27.343

26.430

0.00%

Jul 11, 2012

27.105

26.925

27.237

26.798

0.68%

Jul 10, 2012

26.923

27.303

27.553

26.720

-1.40%

Jul 09, 2012

27.305

26.962

27.480

26.925

1.26%

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks. 

Major Economic Events for the week of July 9 – 13 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

 Event

Actual

Forecast

Previous

Jul 9

EUR

Sentix Investor Confidence

-29.6

-26.3

-28.9

 

GBP

BRC Retail Sales Monitor y/y

1.4%

 

1.3%

GBP

RICS House Price Balance

-22%

-15%

-17%

Jul 10

EUR

French Industrial Production m/m

-1.9%

-0.9%

1.4%

EUR

Italian Industrial Production m/m

0.8%

-0.3%

-2.0%

GBP

Manufacturing Production m/m

1.2%

0.1%

-0.8%

GBP

Trade Balance

-8.4B

-9.0B

-9.7B

GBP

NIESR GDP Estimate

-0.2%

 

0.1%

Jul 11

USD

Trade Balance

-48.7B

-48.5B

-50.6B

 

USD

Crude Oil Inventories

-4.7M

-1.3M

-4.3M

Jul 12

EUR

Industrial Production m/m

0.6%

0.0%

-1.1%

 

USD

Unemployment Claims

350K

376K

376K

USD

Import Prices m/m

-2.7%

-1.5%

-1.2%

USD

Federal Budget Balance

-59.7B

-91.7B

-124.6B

Jul 13

CHF

PPI m/m

-0.3%

-0.2%

-0.2%

USD

PPI m/m

0.1%

-0.5%

-1.0%

USD

Prelim UoM Consumer Sentiment

72.0

73.5

73.2

 

Historical:

Highest: 49.813 on Apr 25, 2011

Average: 27.592 over this period.

Lowest: 14.655 on Feb 05, 2010

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

 Event

Forecast

Previous

Jul 16

7:15

CHF

Industrial Production q/q

-7.5%

8.8%

9:00

EUR

CPI y/y

 

2.4%

12:30

USD

Retail Sales m/m

 

-0.2%

12:30

USD

Empire State Manufacturing Index

 

2.3

14:00

USD

Business Inventories m/m

 

0.4%

Jul 17

8:30

GBP

CPI y/y

 

2.8%

9:00

EUR

German ZEW Economic Sentiment

 

-16.9

9:15

ALL

G7 Meetings

   

12:30

USD

CPI m/m

 

-0.3%

13:00

USD

TIC Long-Term Purchases

 

25.6B

13:15

USD

Industrial Production m/m

 

-0.1%

Jul 18

8:30

GBP

Claimant Count Change

 

8.1K

8:30

GBP

Unemployment Rate

 

8.2%

9:00

CHF

ZEW Economic Expectations

 

-43.4

12:30

USD

Building Permits

 

0.78M

12:30

USD

Housing Starts

 

0.71M

14:30

USD

Crude Oil Inventories

 

-4.7M

Jul 19

6:00

CHF

Trade Balance

 

2.48B

8:00

EUR

Current Account

 

4.6B

8:30

GBP

Retail Sales m/m

 

1.4%

12:30

USD

Unemployment Claims

   

14:00

USD

Existing Home Sales

 

4.55M

14:00

USD

Philly Fed Manufacturing Index

 

-16.6

Jul 20

6:00

EUR

German PPI m/m

 

-0.3%

8:30

GBP

Public Sector Net Borrowing

 

15.6B

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About: FX Empire Analyst - Barry Norman

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