Silver Weekly Fundamental Analysis September 3-7, 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 ended the week at 31.767 gaining for the week, as precious metals were strong in the current environment. The more traders’ sentiment leaned toward the Mr. Bernanke announcing or support QE the most metals were able to gain. Silver futures prices on Friday rallied sharply, hit a fresh five-month high and are now well into the 30.00 price level The precious metals markets took flight late Friday morning following the much-anticipated remarks by Federal Reserve Chairman Ben Bernanke at a Fed symposium in Jackson Hole, Wyoming. The Fed chief strongly hinted fresh, unconventional U.S. monetary policy stimulus will be implemented at some point. Indeed, he left the door wide open for a fresh quantitative easing initiative to be unveiled at the September FOMC meeting, or at some point in the not-too-distant future.
Aug 31, 2012
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Aug 27, 2012
The thought of the Feds supporting QE gave more belief that the ECB would do the same this coming week and possibly the PBoC, which would be very positive for industrial metals.
There was more weak economic data coming out of the European Union. The EU unemployment rate rose to 11.3% in July, while inflation checked in at 2.6% in August, on an annualized rate, which was higher than expected. There were also rumors and rumblings in the market place that a German finance official was going to resign, which led to further speculation that European Union monetary policy will soon be eased further. We’ll find out more next Thursday when the monthly meeting of the European Central Bank occurs, including a highly awaited press conference from ECB head Mario Draghi. The market place does expect the ECB to announce a fresh monetary stimulus package soon.
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.
Tier 1 and 2 Economic Releases for August 27-31, 2012
Swedish Retail Sales (MoM)
German Ifo Business Climate Index
German Current Assessment
German Business Expectations
HIA New Home Sales (MoM)
GfK German Consumer Climate
CB Consumer Confidence
Construction Work Done (QoQ)
KOF Leading Indicators
German CPI (MoM)
Pending Home Sales (MoM)
Building Consents (MoM)
Retail Sales (YoY)
Building Approvals (MoM)
Private New Capital Expenditure (QoQ)
German Unemployment Change
Core PCE Price Index (MoM)
Personal Spending (MoM)
Initial Jobless Claims
Continuing Jobless Claims
South Korean Industrial Production (YoY)
Tokyo Core CPI (YoY)
Industrial Production (MoM)
Nationwide HPI (MoM)
Michigan Consumer Sentiment
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 for the upcoming week… Tiers 3 keep your eyes on these
Government Bond Auction
Date Time Country
Sep 03 09:10 Norway Bond auction
Sep 03 10:00 Belgium OLO auction
Sep 04 00:30 Japan Auctions 10Y JGBs
Sep 04 09:15 Austria Bond auction
Sep 04 09:30 Belgium Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills
Sep 04 14:30 UK Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep
Sep 05 09:10 Sweden Nominal bond auction
Sep 05 09:30 Germany Eur 5.0bn Sep 2022 Bund auction
Sep 05 09:30 UK 4.5% 2042 Gilt auction
Sep 06 00:30 Japan Auctions 30Y JGBs
Sep 06 08:30 Spain Bono auction
Sep 06 08:50 France OAT auction
Sep 06 09:10 Sweden I/L bond auction
Sep 06 15:00 US Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &
Sep 07 15:30 Italy
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.comView all of FX Empire Analyst - Barry Norman's Articles