Silver Weekly Fundamental Analysis August 27-31, 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 incredible week climbing from a low of 27.883 on Monday to close at 30.735 on Friday. Silver followed in the cues from Gold but was also week supported in the metals family. Precious metals surged this week on hopes of Fed QE3 based on FOMC minutes, but more and more speculation of stimulus from China helped support the metals class.

Date

Last

Open

High

Low

Change %

Aug 24, 2012

30.735

30.430

30.760

30.195

0.99%

Aug 23, 2012

30.435

29.822

30.785

29.783

2.10%

Aug 22, 2012

29.808

29.223

29.878

29.178

1.99%

Aug 21, 2012

29.225

28.645

29.460

28.612

2.01%

Aug 20, 2012

28.648

28.070

28.788

27.883

2.04%

Midweek the Chinese Premier all but said that they would be offering stimulus through the PBoC which was followed by a weak release from HSBC PMI.

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 up to the data analysis and information in our weeklyreports.

 

Major Economic Events for the week of August 20-24, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Aug. 20

GBP

Rightmove House Price Index (MoM) 

-2.4%

 

-1.7%

Aug. 21 

GBP

CBI Industrial Trends Orders 

-21

-8

-6

Aug. 22 

USD

Existing Home Sales 

4.47M

4.52M

4.37M

Aug. 23

CNY

Chinese HSBC Manufacturing PMI 

47.80

 

49.30

 

EUR

German GDP (QoQ) 

0.3%

0.3%

0.3%

 

EUR

German GDP (YoY) 

0.5%

0.5%

0.5%

 

EUR

French Manufacturing PMI 

46.2

43.6

43.4

 

EUR

German Manufacturing PMI 

45.1

43.4

43.0

 

EUR

Manufacturing PMI 

45.3

44.2

44.0

 

GBP

BBA Mortgage Approvals 

28.4K

28.2K

25.9K

 

GBP

CBI Distributive Trades Survey 

-3

15

11

 

USD

Initial Jobless Claims 

372K

365K

368K

 

USD

Continuing Jobless Claims 

3317K

3300K

3313K

 

USD

New Home Sales 

372K

365K

359K

Aug. 24

GBP

Business Investment (QoQ) 

-1.5%

2.8%

1.9%

 

GBP

GDP (QoQ) 

-0.5%

-0.5%

-0.7%

 

GBP

GDP (YoY) 

-0.5%

-0.6%

-0.8%

 

USD

Core Durable Goods Orders (MoM) 

-0.4

0.5%

-1.4%

 

USD

Durable Goods Orders (MoM) 

4.2

2.4%

1.3%

Historical:

Highest: 49.813 on Apr 25, 2011

Average: 27.592over 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

Previous

 Aug. 27

09:00

EUR

German Ifo Business Climate Index 

103.3 

 

09:00

EUR

German Current Assessment 

111.6 

 

09:00

EUR

German Business Expectations 

95.6 

Aug. 28

07:00

EUR

GfK German Consumer Climate 

5.9 

 

15:00

USD

CB Consumer Confidence 

65.9 

Aug. 29

01:00

EUR

German CPI (MoM) 

0.4% 

 

01:00

EUR

German CPI (YoY) 

1.7% 

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

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