Silver Weekly Fundamental Analysis December 10 -14, 2012, Forecast

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 closed the week at 33.128 falling from the high of 33.905 on Monday. After positive data last week from China industrial metals soared in the early part of the week keeping silver strong. Precious metals also remained on the upside. By mid week traders started to look for more risk and eased off of precious metals.

As the UK revised its growth downward on Wednesday, the outlook for industrial metals turned negative, and was followed by a huge downturn after the ECB and the German downgrade of GDP for 2013. Although market sentiment was not as positive traders continued to add risk leaving precious metals trending down. As the week concluded precious metals remained in a sideways action with silver falling as lower demand for industrial metals weighed on the markets. Positive data in the US limited the decline but also saw a rise in the US dollar which makes trading dollar denominated commodities more expensive.

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 actual v. forecast for Euro, GPB, the Franc, and USD

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