Silver Weekly Fundamental Analysis September 24-28, 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 had an interesting week soaring on the heels of gold but also well supported on the industrial side. Every time markets began to worry about growth and manufacturing, more stimulus money was offered helping increase future demands on the metals. The Bank of Japan announced new stimulus followed by the PBoC. Silver broke above 35.00 per ounce during the weeks trading session and ended the week at 34.57

Date

Last

Open

High

Low

Change %

Sep 21, 2012

34.570

34.690

35.228

34.383

-0.30%

Sep 20, 2012

34.675

34.683

34.795

34.133

-0.04%

Sep 19, 2012

34.688

34.735

35.023

34.325

-0.10%

Sep 18, 2012

34.722

34.248

35.073

34.023

1.37%

Sep 17, 2012

34.253

34.755

34.798

33.863

-1.45%

Silver has been outperforming gold over the past 10 weeks as investors are hoarding and buying poor man’s gold to hedge against worldwide quantitative easing and pump-priming being implemented by Central Banks around the world to devalue their respective currencies.

The Bank of Japan joined the Fed, ECB, China, South Korea and others by announcing an aggressive stimulus program. This is extremely inflationary and bullish for gold and silver and bearish for the purported safe havens namely the U.S. dollar, long term treasuries, Euro, Yen and Yuan.

Remember Japan is the third largest economy in the world and they are currently facing an economic slowdown, rising electricity prices due to increase oil imports and is in the midst of a territorial dispute in the South China Seas with China. Japan is mimicking Bernanke’s QE decision last week to attempt to devalue their currencies to boost exports. The Japanese stimulus is massive and will now total nearly 20% of Japan’s total economy. The U.S. dollar is falling as these drastic moves were much bigger than the consensus expected.

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 17-21, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Sep. 17

GBP

Rightmove House Price Index (MoM) 

-0.6%

 

-2.4%

 

USD

NY Empire State Manufacturing Index 

-10.4

-2.0

-5.8

Sep. 18

GBP

Core CPI (YoY) 

2.1%

2.2%

2.3%

 

GBP

CPI (YoY) 

2.5%

2.5%

2.6%

 

GBP

CPI (MoM) 

0.5%

0.5%

0.1%

 

EUR

German ZEW Economic Sentiment 

-18.2

-19.0

-25.5

 

EUR

ZEW Economic Sentiment 

-3.8

-16.5

-21.2

 

USD

Current Account 

-117.4B

-125.5B

-133.6B

 

USD

TIC Net Long-Term Transactions 

67.0B

45.3B

9.3B

Sep. 19  

USD

Building Permits 

0.803M

0.796M

0.811M

 

USD

Housing Starts 

0.750M

0.765M

0.733M

 

USD

Existing Home Sales 

4.82M

4.55M

4.47M

Sep. 20 

EUR

French Manufacturing PMI 

42.6

46.4

46.0

 

EUR

German Manufacturing PMI 

47.3

45.3

44.7

 

EUR

Manufacturing PMI 

46.0

45.4

45.1

 

GBP

Retail Sales (MoM) 

-0.2%

-0.4%

0.3%

 

GBP

Retail Sales (YoY) 

2.7%

2.7%

2.3%

 

EUR

Spanish 10-Year Obligation Auction 

5.666%

 

6.647%

 

GBP

CBI Industrial Trends Orders 

-8

-15

-21

 

USD

Initial Jobless Claims 

382K

375K

385K

 

USD

Continuing Jobless Claims 

3272K

3300K

3304K

 

USD

Philadelphia Fed Manufacturing Index 

-1.9

-4.0

-7.1

 

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

Date

Time

Currency

Event

Forecast

Previous

 Sep. 24

09:00

EUR

German Ifo Business Climate Index 

102.3

102.3

 

09:00

EUR

German Current Assessment 

110.9

111.2

 

09:00

EUR

German Business Expectations 

95.0

94.2

Sep. 25

07:00

EUR

GfK German Consumer Climate 

5.9

5.9

 

15:00

USD

CB Consumer Confidence 

62.0

60.6

Sep. 26

01:00

EUR

German CPI (MoM) 

-0.1%

0.4%

 

01:00

EUR

German CPI (YoY) 

2.0%

2.1%

 

11:00

GBP

CBI Distributive Trades Survey 

5

-3

Sep. 27 

08:55

EUR

German Unemployment Rate 

6.8%

6.8%

 

08:55

EUR

German Unemployment Change 

10K

9K

 

09:30

GBP

Current Account 

-12.4B

-11.2B

 

09:30

GBP

GDP (QoQ) 

-0.5%

-0.5%

 

09:30

GBP

GDP (YoY) 

-0.5%

-0.5%

 Sep. 28 

07:45

EUR

French Consumer Spending (MoM) 

-0.2%

0.1%

 

08:00

CHF

KOF Leading Indicators 

1.55

1.57

Government Bond Auction

Date Time Country 

Sep 24 09:10 Norway 

Sep 24 09:30 Germany 

Sep 24 10:00 Belgium 

Sep 24 15:30 Italy  

Sep 25 08:30 Holland 

Sep 25 08:30 Spain 

Sep 25 09:10 Italy  

Sep 25 14:30 UK 

Sep 25 17:00 US 

Sep 26 09:10 Italy  

Sep 26 09:10 Sweden 

Sep 26 09:00 Germany 

Sep 26 14:30 Sweden 

Sep 26 17:00 US 

Sep 27 00:30 Japan 

Sep 27 09:10 Italy  

Sep 27 17:00 US

 

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About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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bharat

sir i buy silver 2 lot on rate 63200. so what can i do? hold or any stoploss

FX Empire Analyst - Barry Norman

Silver is trading near the top when it hits 36.00usd. I do not know the conversion as I do not what currency you are trading. But if Silver tops 36.00 I would take profit.