Silver Weekly Fundamental Analysis September 17-21, 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 trading at 34.65 off the high of the day of 34.98 as industrial metals and precious metals soared most of the week, but more on announcement from the FOMC of a complete and comprehensive program of stimulus. Much more than markets had expected.

Date

Last

Open

High

Low

Change %

Sep 14, 2012

34.695

34.618

34.980

34.343

0.22%

Sep 13, 2012

34.620

33.285

34.860

32.725

4.02%

Sep 12, 2012

33.283

33.563

34.138

32.523

-0.84%

Sep 11, 2012

33.565

33.500

33.863

33.398

0.19%

Sep 10, 2012

33.503

33.693

34.008

33.290

-0.56%

The release of the plans gave a huge bump to precious metals as a hedge against inflation but also lowered the USD making the purchases more attractive to foreign buyers. But also industrial metals bumped up on hopes of increased demand for manufacturing and productions. With the new BMS program introduced, housing and construction should soar which is supportive of the metals pack.

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 September 10-14, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Time

Currency

Event

Actual

Forecast

Previous

Sep. 11

00:01

GBP

RICS House Price Balance 

-19%

-22% 

-23% 

 

06:30

EUR

French Non-Farm Payrolls (QoQ) 

-0.1%

-0.1% 

-0.1% 

 

09:30

GBP

Trade Balance 

-7.2B

-9.0B 

-10.1B 

 

13:30

USD

Trade Balance 

-42.0B

-44.0B 

-41.9B 

 Sep. 12

06:30

EUR

French CPI (MoM) 

0.7%

0.5% 

-0.4% 

 

07:00

EUR

German CPI (MoM) 

0.4%

0.3% 

0.3% 

 

07:00

EUR

German CPI (YoY) 

2.1%

2.0% 

2.0% 

 

09:30

GBP

Average Earnings Index +Bonus 

1.5%

1.6% 

1.8% 

 

09:30

GBP

Claimant Count Change 

-15.0K

0.5K 

-13.6K 

 

10:00

EUR

Industrial Production (MoM) 

0.6%

-0.1% 

-0.6% 

 

13:30

USD

Import Price Index (MoM) 

0.7%

1.4% 

-0.7% 

 

18:00

USD

10-Year Note Auction 

1.764%

 

1.680% 

 Sep. 13

08:15

CHF

PPI (MoM) 

0.5%

-0.4% 

-0.3% 

 

08:30

CHF

Interest Rate Decision 

0.00%

0.00% 

0.00% 

 

13:30

USD

Core PPI (MoM) 

0.2%

0.2% 

0.4% 

 

13:30

USD

PPI (MoM) 

1.7%

1.1% 

0.3% 

 

13:30

USD

Initial Jobless Claims 

382K

370K 

367K 

 

13:30

USD

Continuing Jobless Claims 

3283K

3318K 

3332K 

 

13:30

USD

PPI (YoY) 

2.0%

1.4% 

0.5% 

 

13:30

USD

Core PPI (YoY) 

2.5%

2.6% 

2.5% 

 

17:30

USD

Interest Rate Decision 

0.25%

0.25% 

0.25% 

 

19:00

USD

Federal Budget Balance 

-191.0B

-155.0B 

-69.6B 

Sep. 14

10:00

EUR

CPI (YoY) 

2.6%

2.6% 

2.6% 

 

10:00

EUR

Employment Change (QoQ) 

0.0%

-0.2% 

-0.2% 

 

10:00

EUR

Core CPI (YoY) 

1.5%

1.7% 

1.7% 

 

13:30

USD

Core CPI (MoM) 

0.1%

0.2% 

0.1% 

 

13:30

USD

Core Retail Sales (MoM) 

0.8%

0.6% 

0.8% 

 

13:30

USD

CPI (MoM) 

0.6%

0.5% 

0.0% 

 

13:30

USD

Retail Sales (MoM) 

0.9%

0.7% 

0.6% 

 

13:30

USD

CPI (YoY) 

1.7%

1.7% 

1.4% 

 

13:30

USD

Core CPI (YoY) 

1.9%

2.0% 

2.1% 

 

14:15

USD

Industrial Production (MoM) 

-1.2%

0.2% 

0.5% 

 

14:55

USD

Michigan Consumer Sentiment 

79.2

74.0 

74.3 

Historical: From 2010 to present

Highest: 49.813 on Apr 25, 2011

Average: 28.468 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

 Sep. 17

13:30

USD

NY Empire State Manufacturing Index 

-2.0 

-5.8 

Sep. 18

09:30

GBP

CPI (YoY) 

2.5% 

2.6% 

 

09:30

GBP

CPI (MoM) 

0.5% 

0.1% 

 

10:00

EUR

German ZEW Economic Sentiment 

-19.0 

-25.5 

 

13:30

USD

Current Account 

-126.0B 

-137.3B 

 

14:00

USD

TIC Net Long-Term Transactions 

 

9.3B 

Sep. 19 

13:30

USD

Building Permits 

0.800M 

0.811M 

 

13:30

USD

Housing Starts 

0.765M 

0.746M 

 

15:00

USD

Existing Home Sales 

4.56M 

4.47M 

Sep. 20 

07:58

EUR

French Manufacturing PMI 

46.4 

46.0 

 

08:28

EUR

German Manufacturing PMI 

45.3 

44.7 

 

09:30

GBP

Retail Sales (MoM) 

-0.4% 

0.3% 

 

09:30

GBP

Retail Sales (YoY) 

2.7% 

2.8% 

 

11:00

GBP

CBI Industrial Trends Orders 

-15 

-21 

Government Bond Auction

Date Time Country 

Sep 17 09:10 Slovakia

Sep 17 10:00 Norway 

Sep 18 08:30 Spain 

Sep 18 09:10 Greece 

Sep 18 09:30 Belgium 

Sep 19 09:10 Sweden 

Sep 19 09:30 Germany 

Sep 19 09:30 Portugal 

Sep 19 10:00 Norway 

Sep 20 08:30 Spain 

Sep 20 08:50 France 

Sep 20 09:30 UK 

Sep 20 09:50 France 

Sep 20 15:00 US 

Sep 20 17:00 US 

Sep 21 15:30 Italy  

 

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