Silver Weekly Fundamental Analysis December 17-21, 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 had an interesting week with precious metals remaining weak and gold closing the week lower, silver closed at 32.330 after beginning the week at 33.153 also down for the week but industrial metal helped limit silvers losses after China’s HSBC PMI manufacturing report showed a continued expansion.

The data not only climbed in the 50 territory but also beat the prior months report, after showing contraction for the last 6 months, it seems as though Chinese production is back into full production mode.

Precious metals waned towards the end of the week as traders looked for more risk and others left the markets ahead of a final deal in the US to avoid the fiscal cliff scenario. The deal which will be struck at the last minute will have a lot of tax increases which might affect the value of trades and profit, so traders are taking gains and losses ahead of the unknown. The US budget and tax negotiation will remain the main focus this week.

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 December 10-14 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