Gold and Silver React to Greece and Spain

Prices have changed very little from prior closing after the Spanish bond yield climbed to a record  level of 7.13%, casting a dim shadow over the European economic outlook.

 Asian markets retreated for the same reason and increased  the probability of the fourth nation  and one of the largest economies in the EU to seek for another bailout. Spain had initially sought a bailout of 1000bn euro to rescue its banks only, but now needs to have its overall debt restructured. 

Speculators are therefore eyeing the G-20 meeting as the focus now have shifted to Spain due to rising borrowing cost.

As expected, the pro-bailout party  The New Democracy win in Greece failed to stop the threat of contagion. The euro remained under significant threat of downside.

The threat of the situation should keep gold under pressure for the day. Although ambiguity over the market stance is not letting the metal fall either. As the Greek coalition talks move into the second day with Germany’s Merkel offering no flexibility on their emergency loan, the euro will continue to weaken today as economic sentiment and worries continue. Therefore, gold may come under pressure during the day.

A forecasted increase in US housing starts and building permits may support the dollar index, also keeping  gold under strain for the day. The G-20 outcome which is expected to include the  approval of a emergency loan and an  increase in IMF’s loan may support the market sentiment. Hence, gold may again find itself in a rigid range.

Silver futures prices are also quoting higher at the at present moment. But the early gains for the day may not sustain as the relief rally has failed to stop the spread of Greece contagion, raising the Spanish borrowing cost to the Euro area highest. An announcement is expected that  the nation seeking an international bailout and that would be a threat for euro. This announcement and the size of the request might increase market volatility and more markets back to risk aversion mode. This is therefore  a negative factor for the metal as well.

From the eco calendar, reports today might show weakening economic sentiment and a hazard to current situation. Therefore, silver may come under pressure also, an increase in US housing starts and building permits may support the dollar index, pushing silver to a downside.

Silver Fundamental Analysis June 19, 2012, Forecast

Analysis and Recommendations:

Silver followed the markets and fell 0.462 trading at 28.278, as the USD gained a bit of momentum at the cost of precious metals, it was a day of low volume and market calm, as investors slowly returned to the markets and unwound protective positions. Risk Aversion remains but a more positive sentiment was felt in the markets until late in the day when worries about Spain’s skyrocketing borrowing costs hit investors straight in the face.

This week gets crazy starting on Tuesday with the G20 meetings and the FOMC and Fed Funds rate right behind. This will be a busy week for eco data.

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 weekly reports.

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 Event

Forecast

Previous

Jun 19

8:30

GBP

CPI y/y

 

3.0%

9:00

EUR

ZEW Economic Sentiment

 

-2.4

12:30

USD

Building Permits

 

0.72M

12:30

USD

Housing Starts

 

0.72M

Day 2

ALL

G20 Meetings

   

Jun 20

6:00

EUR

German PPI m/m

 

0.2%

8:30

GBP

Claimant Count Change

 

-13.7K

8:30

GBP

MPC Meeting Minutes

0-0-9

0-0-9

8:30

GBP

Unemployment Rate

 

8.2%

9:00

CHF

ZEW Economic Expectations

 

-4.0

14:30

USD

Crude Oil Inventories

 

-0.2M

16:30

USD

FOMC Statement

   

16:30

USD

Federal Funds Rate

<0.25%

<0.25%

18:00

USD

FOMC Economic Projections

   

18:15

USD

FOMC Press Conference

   

Jun 21

6:00

CHF

Trade Balance

 

1.33B

7:00

EUR

French Flash Manufacturing PMI

 

44.7

7:00

EUR

French Flash Services PMI

 

45.1

7:15

CHF

Industrial Production q/q

 

7.9%

7:30

EUR

German Flash Manufacturing PMI

 

45.2

7:30

EUR

German Flash Services PMI

 

51.8

8:00

EUR

Current Account

 

9.1B

8:00

EUR

Flash Manufacturing PMI

 

45.1

8:00

EUR

Flash Services PMI

 

46.7

8:30

GBP

Retail Sales m/m

 

-2.3%

10:00

GBP

CBI Industrial Order Expectations

 

-17

12:30

USD

Unemployment Claims

 

386K

13:00

USD

Flash Manufacturing PMI

 

54.0

 

Silver Forecast June 18, 2012, Technical Analysis

The silver markets did almost nothing during the Friday session as the markets brace for the results of the Greek elections. The silver markets also have to worry about industrial demand for the metal, and as the economic outlook is slowing in most places, there is a good chance that demand will fall off of a cliff.

However, we now have had word that the central banks around the world are ready to start increasing liquidity again, and as a result we think the silver markets could gain. The $30 level has to be overcome first though for us to feel comfortable buying silver. As a sell signal, we need to see a break and daily close below the $27 level. 

Silver Forecast June 18, 2012, Technical Analysis
Silver Forecast June 18, 2012, Technical Analysis

Silver Forecast for the Week of June 18, 2012, Technical Analysis

The silver markets did very little over the previous week, and the silver markets look very uncertain at this point. The $27 level below is offering support, and we like going long if we get a bounce. The bounce would have to clear the top of the shooting star for the previous week, right at the $30 level. If this happens, we expect a run to the $35 level. If the $27 level gives way to the downside, we will see $25, and then perhaps the $20 level. In the meantime, we are waiting for one of these moves to make a trade.

Silver Forecast for the Week of June 18, 2012, Technical Analysis
Silver Forecast for the Week of June 18, 2012, Technical Analysis

Silver Weekly Fundamental Analysis June 18-22, 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 (e.g. 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 up at 28.638 and for the week gained close to 0.26 cents. Silver followed just steps behind gold in this week’s trading.

Date

Last

Open

High

Low

Change %

Jun 15, 2012

28.638

28.560

28.805

28.495

0.26%

Jun 14, 2012

28.563

28.825

29.075

28.170

-0.92%

Jun 13, 2012

28.828

28.815

29.087

28.705

0.06%

Jun 12, 2012

28.810

28.373

29.013

28.333

1.53%

Jun 11, 2012

28.375

28.910

28.950

28.263

-1.88%

Markets shifted from the safety of the USD to gold as eco data and the possibility of Fed intervention depressed the USD. As silver moves in tandem, it also enjoyed the new strength. The FOMC meeting is this coming week on the 19th and Greek elections are this weekend, so we might be in for a wild ride in the beginning of the 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.

Historical:

Highest: 49.813 on Apr 25, 2011

Average: 27.592over this period.

Lowest: 14.655 on Feb 05, 2010

Silver Fundamental AnalysisJune 18, 2012, Forecast

Analysis and Recommendations:

Silver moved up over 1% today, by passing gold’s percentage of increase to trade at 28.695. Silver is a secondary safe haven but also its current price is depressed as it remains under 30.00 and with the DX falling close to 82. It is a perfect situation to purchase silver.

Investors may be very re-actionary today ahead of the Greece election and reports today may show the awful state of US industrial production and lowered confidence which may lead silver to a down side in evening. On the other hand, US treasuries inflows might rise and that is supportive for dollar.

Notice the chart below, comparing today’s movement of gold and silver. 

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 weekly reports.

Economic Data June 15, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jun. 15

 

JPY

 

 

 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 

 

 

 

GBP

 

 

 

Trade Balance 

-10.1B

 

-8.5B 

 

-8.7B 

   

 

 

EUR

 

 

 

Employment Change (QoQ) 

-0.2%

 

-0.2% 

 

-0.3% 

   

 

 

CAD

 

 

 

Manufacturing Sales (MoM) 

-0.80%

 

1.00% 

 

1.90% 

 

 

 

 

USD

 

 

 

NY Empire State Manufacturing Index 

2.3

 

13.0 

 

17.1 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 Event

Forecast

Previous

Jun 18

18th-22nd

GBP

Nationwide Consumer Confidence

45

44

 

Day 1

ALL

G20 Meetings

   

Jun 19

8:30

GBP

CPI y/y

 

3.0%

9:00

EUR

ZEW Economic Sentiment

 

-2.4

12:30

USD

Building Permits

 

0.72M

12:30

USD

Housing Starts

 

0.72M

Day 2

ALL

G20 Meetings

   

Jun 20

6:00

EUR

German PPI m/m

 

0.2%

8:30

GBP

Claimant Count Change

 

-13.7K

8:30

GBP

MPC Meeting Minutes

0-0-9

0-0-9

8:30

GBP

Unemployment Rate

 

8.2%

9:00

CHF

ZEW Economic Expectations

 

-4.0

14:30

USD

Crude Oil Inventories

 

-0.2M

16:30

USD

FOMC Statement

   

16:30

USD

Federal Funds Rate

<0.25%

<0.25%

18:00

USD

FOMC Economic Projections

   

18:15

USD

FOMC Press Conference

   

Jun 21

6:00

CHF

Trade Balance

 

1.33B

7:00

EUR

French Flash Manufacturing PMI

 

44.7

7:00

EUR

French Flash Services PMI

 

45.1

7:15

CHF

Industrial Production q/q

 

7.9%

7:30

EUR

German Flash Manufacturing PMI

 

45.2

7:30

EUR

German Flash Services PMI

 

51.8

8:00

EUR

Current Account

 

9.1B

8:00

EUR

Flash Manufacturing PMI

 

45.1

8:00

EUR

Flash Services PMI

 

46.7

8:30

GBP

Retail Sales m/m

 

-2.3%

10:00

GBP

CBI Industrial Order Expectations

 

-17

12:30

USD

Unemployment Claims

 

386K

13:00

USD

Flash Manufacturing PMI

 

54.0

14:00

USD

Existing Home Sales

 

4.62M

14:00

USD

Philly Fed Manufacturing Index

 

-5.8

Jun 22

8:00

EUR

German Ifo Business Climate

 

106.9

All Day

EUR

ECOFIN Meetings

   

13:00

EUR

Belgium NBB Business Climate

 

-11.2

Silver Forecast June 15, 2012, Technical Analysis

The silver markets did very little during the session on Thursday as the world sits and waits for the results of the Greek election on Sunday. The market for silver is highly influenced by both the inflation trade and the industrial demand, and as a result have been underperforming the gold markets for some time. Because of this, we are not very interested in buying, but have two distinct levels that must be respected: the $27 and $30 levels. If the market can break out of the consolidation area to get above $30, we are buyers. If the market can get below the $27 level, we are sellers. Until then, we are flat.

 

Silver Forecast June 15, 2012, Technical Analysis
Silver Forecast June 15, 2012, Technical Analysis

Gold & Silver and the G20 Central Bank Plan

G20 officials stated that central banks from the major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the Greek election result roils markets.

Sterling rose slightly against the dollar on Thursday after the British government and the Bank of England said it will act together with new monetary tools to address tightening credit conditions in the country.

The Fed will also be ready to act if required. This will be one of the first time that G20 central banks have working in unison around the globe. Markets are also expected the Fed to relax monetary policy or introduce some new stimulus plan, to help the ailing US economy jumpstart.

Gold futures prices have revived a tad in the early trading after a nice pull back in late yesterday. The lower US inflation would have increased the deflation concern which led the metal to a sharp drop from its intraday high but the same has raised expectation for Fed to embrace fresh easing and helped the metal to revive.

Asian equities are also having a tepid lukewarm day ahead of the most eyed Greece election on June 17. The Euro at present is showing slight weakness against the dollar after the Spanish bond yield rose to the record high of 7.01%, an unsustainable level.

Markets are expected to be busy  enough as diversified comments are coming from the leading financial chiefs ahead of the highly anticipated Greece re-election and Fed meet. While the G-20 leaders are ready to infuse liquidity to contain the credit squeeze, severe strain might emerge after an unexpected outcome of three elections this week end. France and Egypt are the two other countries having ballot creating nuisance in  market.

However, a coordinated attitude from central banks to provide liquidity may lead temporary support to the market. Gold is probably therefore taking the advantage out of it , however; the comments from the diplomats are still not convinced especially after the Fed let down the market expectation few days back. Hence, the splendid gain may be short-lived. Reports today may show the awful  state of US industrial production and a feeble confidence which may lend support to gold in evening. On the other hand, US treasuries inflows might rise and that is supportive for dollar. Said above, it is apparent that a disordered trading session is ahead today. While global concerns are fatal for gold, proactive statements from officials would be the accommodating cause for prices to stay strong. Hence, probable range for gold would be $1607-1642.

Silver futures prices have also revived a bit which may be due to the gain in global equities and comments from the officials for stimulus. However the  market may be very volatile today ahead of the Greece election and reports today may show the awful state of US industrial production and lackluster confidence which may lead silver to a down side in evening. On the other hand, US treasuries inflows might rise and that is supportive for dollar. 

Silver Fundamental Analysis June 15, 2012, Forecast

Analysis and Recommendations:

Silver is trading at 28.43 down 0.518, which surprised the markets. It decoupled from gold and lost 1.79% in today’s session, it seems that investors could not see the shiny metal breaking back through the 30.00 price and took their profits.

With the DX still high in the early part of the day, Silver was up over 0.3% sparking a selloff, as the greenback fell in later trading, it did not stimulate a return to the markets. Silver is expected to remain depressed as investors move to the sidelines awaiting results from Greece and the upcoming FOMC meetings.

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 weekly reports.

Economic Data June 14, 2012 actual v. forecast

Date

Time

 

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jun. 14

05:30

 

 

 

 

Industrial Production (MoM) 

-0.2%

 

0.2% 

 

0.2% 

 

 

 

08:30

 

 

 

 

Interest Rate Decision 

0.00%

 

0.00% 

 

0.00% 

 

 

 

08:30

 

 

 

 

SNB Chairman Thomas Jordan speaks 

 

 

 

 

 

 

 

 

09:00

 

 

 

 

ECB Monthly Report 

 

 

 

 

 

 

 

 

10:00

 

 

 

 

CPI (YoY) 

2.4%

 

2.4% 

 

2.4% 

 

 

 

10:00

 

 

 

 

Core CPI (YoY) 

1.6%

 

1.6% 

 

1.6% 

 

 

 

13:30

 

 

 

 

Core CPI (MoM) 

0.2%

 

0.2% 

 

0.2% 

 

 

 

13:30

 

 

 

 

CPI (MoM) 

-0.3%

 

-0.2% 

 

0.0% 

 

 

 

13:30

 

 

 

 

Current Account 

-137.3B

 

-132.3B 

 

-118.7B 

   

 

13:30

 

 

 

 

Initial Jobless Claims 

386K

 

375K 

 

380K 

   

 

13:30

 

 

 

 

Continuing Jobless Claims 

3278K

 

3269K 

 

3311K 

   

 

13:30

 

 

 

 

CPI (YoY) 

1.7%

 

1.8% 

 

2.3% 

 

 

 

13:30

 

 

 

 

Core CPI (YoY) 

2.3%

 

2.2% 

 

2.3% 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 Event

Previous

Jun 15

8:30

GBP

Trade Balance

-8.6B

12:30

USD

Empire State Manufacturing Index

17.1

13:00

USD

TIC Long-Term Purchases

36.2B

13:15

USD

Capacity Utilization Rate

79.2%

13:15

USD

Industrial Production m/m

1.1%

13:55

USD

Prelim UoM Consumer Sentiment

79.3

 

Silver Forecast June 14, 2012, Technical Analysis

The Silver markets continued to grind on Wednesday as the market simply cannot find any traction. The silver markets are being deflated by the lack of industrial demand, and the silver markets will continue to underperform the gold markets as a result. The $27 level below could be considered the “floor” of recent trading, and if it gives way – we would be massive sellers of this market. The $30 level above is a large resistance area that the market will have overcome in order for is to buy silver at this point. In the mean time, we are staying out of this overly choppy market.

Silver Forecast June 14, 2012, Technical Analysis
Silver Forecast June 14, 2012, Technical Analysis

Silver Fundamental Analysis June 14, 2012, Forecast

Analysis and Recommendations:

Silver is trading at 29.08 adding 0.59 in a strong day of trading. Silver matched gold’s movements today, as gold added 0.53% or 8.55 at this time.

Silver holdings of iShares silver trust, the largest ETF backed by the metal, increased to 9,696.23 tons, as on June 12. The dollar index, which measures the US unit against a basket of six major, edged down to 82.386, compared with 82.529 in Monday’s late North American trading.

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 weekly reports.

Economic Data for June 13, 2012 actual v. forecast

Date

Time

 

Currency

 

Importance

 

Event

Actual

 

Forecast

 

Previous

 

 

Jun. 13

00:00

 

JPY

 

 

 

BoJ Governor Shirakawa Speaks 

 

 

 

 

 

 

 

 

01:30

 

AUD

 

 

 

Westpac Consumer Sentiment 

0.30%

 

 

 

0.80% 

 

 

 

06:30

 

EUR

 

 

 

French CPI (MoM) 

-0.1%

 

0.2% 

 

0.1% 

 

 

 

07:00

 

EUR

 

 

 

German CPI (MoM) 

-0.2%

 

-0.2% 

 

-0.2% 

 

 

 

07:00

 

EUR

 

 

 

German CPI (YoY) 

1.9%

 

1.9% 

 

1.9% 

 

 

 

08:15

 

CHF

 

 

 

PPI (MoM) 

-0.2%

 

-0.2% 

 

-0.1% 

 

 

 

10:00

 

EUR

 

 

 

Industrial Production (MoM) 

-0.8%

 

-1.0% 

 

-0.1% 

   

 

13:30

 

USD

 

 

 

Core PPI (MoM) 

0.2%

 

0.2% 

 

0.2% 

 

 

 

13:30

 

USD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.0% 

 

-0.3% 

   

 

13:30

 

USD

 

 

 

PPI (MoM) 

-1.0%

 

-0.6% 

 

-0.2% 

 

 

 

13:30

 

USD

 

 

 

Retail Sales (MoM) 

-0.2%

 

-0.2% 

 

-0.2% 

   

 

13:30

 

USD

 

 

 

PPI (YoY) 

0.7%

 

1.1% 

 

1.9% 

 

 

 

13:30

 

USD

 

 

 

Core PPI (YoY) 

2.7%

 

2.8% 

 

2.7% 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 Event

Forecast

Previous

Jun 14

7:30

CHF

Libor Rate

<0.25%

<0.25%

7:30

CHF

SNB Monetary Policy Assessment

   

7:30

CHF

SNB Press Conference

   

8:00

CHF

SNB Financial Stability Report

   

8:00

EUR

ECB Monthly Bulletin

   

9:00

EUR

CPI y/y

 

2.4%

12:30

USD

Unemployment Claims

 

377K

12:30

USD

CPI m/m

 

0.0%

12:30

USD

Current Account

 

-124B

Jun 15

8:30

GBP

Trade Balance

 

-8.6B

12:30

USD

Empire State Manufacturing Index

 

17.1

13:00

USD

TIC Long-Term Purchases

 

36.2B

13:15

USD

Capacity Utilization Rate

 

79.2%

13:15

USD

Industrial Production m/m

 

1.1%

13:55

USD

Prelim UoM Consumer Sentiment

 

79.3

Government Bond Auctions

Date  Time  Country 

Jun 14 09:10 Italy

Jun 14 09:30 UK

Jun 14 15:00 US

Jun 14 17:00 US

Metals in the Morning June 13, 2012

This morning base metals are trading slightly positive by 0.09 to 0.2 percent at LME electronic platform. The Asian equities are trading mixed while early morning machine orders from Japan increased more than expectation supporting gains in base metals.

 Nevertheless, a rise in global equity markets offset concerns about the Euro-zone debt crisis, where Spanish and Italian bond yields hit a record high yesterday. Yields have surged to 6.93 percent the most since 1997 and made Fitch ratings to downgrade 18 Spanish banks. Spain may fail to meet the deficit target of 5.3 percent of GDP even after 45 billion Euros austerity cut and may likely keep the shared currency under pressure for the day.

Further, the Greek elections over the weekend, may determine whether Greece stays in the euro zone, and is expected to keep weighing on prices as investors worry about how further chaos in the single currency region will impact global demand for metals. From the economic data front, the German consumer prices index is likely to remain unchanged after lower Euro-zone inflation.

While the Euro-zone industrial production may further decline weakening metals in the afternoon session. Even the US releases in the form of advanced retail sales and business inventory is likely to remain weak and may continue to weaken metals pack for the day. The mortgage applications is likely to remain weak after a recent Fed survey highlighted that the middle-class in the US has lost the most during the financial crisis. However, the producer price index is likely to fall after cheaper imports and commodity prices and may provide slight cushion to Dollar index .

Concerns highlighting Euro-area may provide investors to take heed on Dollars Index and may continue to weaken metals for the day. Overall, we expect amidst weak Euro and rising borrowing costs coupled with negative economic expectations, base metals may remain weak during the day and initiating shorts might be the ideal strategy.

Gold futures rallied above $1,600 per ounce, as a weaker dollar, debt crisis in Europe and talk of further monetary easing drew investors towards the safe-haven asset i.e. precious metals.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,274.37 tons, as on June 12. Silver holdings of iShares silver trust, the largest ETF backed by the metal, increased to 9,696.23 tons, as on June 12.

The dollar index, which measures the US unit against a basket of six major, edged down to 82.386, compared with 82.529 in Monday’s late North American trading.

Spain’s 10-year bond yields hit their highest in the euro-era on Tuesday, edging closer to the 7% danger level and leaving investors worried about Madrid’s access to the bond market. Fitch Ratings downgraded 18 Spanish banks on Tuesday, less than a week after it cut the country’s sovereign debt rating,  underscoring the potential for lenders’ assets to deteriorate further.

Copper futures closed slightly lower, as investor remained focused on Europe’s sovereign-debt problems despite dovish comments from Federal Reserve Bank of Chicago President Charles Evans. Copper futures for July delivery closed down by 0.2 at $3.3355 per pound on the COMEX of the New York Mercantile Exchange.

Silver Forecast June 13, 2012, Technical Analysis

The silver market got a bit of a bounce on Tuesday as the consolidation area continues. The market has been stuck between the $27 and $30 levels lately, and as a result we think of this as a small range bound market. However, the moves are so choppy that it is difficult to trade this market. The action has been erratic to say the least, and as silver is much less liquid than gold, the market is struggling to make any real moves and simply has been reacting to headlines at this point. As a result, we are waiting to see if one of the levels mentioned previously gets broken before we make a move.

Silver Forecast June 13, 2012, Technical Analysis
Silver Forecast June 13, 2012, Technical Analysis

Silver Fundamental Analysis June 13, 2012, Forecast

Analysis and Recommendations:

Silver ended the day at 28.913 following closely in gold’s footprints, so much so that the chart below depicts gold and silver movement for the day, and as you can see silver matched gold’s moves pip by pip.

Metals were down in early trading but by mid day, investor sentiments had returned to risk aversion and safe haven and gold was the favored player today accompanied by silver and the USD.

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 weekly reports.

Economic Data for June 12, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jun. 12

 

GBP

 

 

 

RICS House Price Balance 

-16%

 

-18% 

 

-19% 

 

 

 

 

JPY

 

 

 

Tertiary Industry Activity Index (MoM) 

-0.3%

 

0.4% 

 

-0.6% 

 

 

 

 

JPY

 

 

 

BoJ Governor Shirakawa Speaks 

 

 

 

 

 

 

 

 

 

AUD

 

 

 

NAB Business Confidence 

-2

 

 

 

 

 

 

 

EUR

 

 

 

French Non-Farm Payrolls (QoQ) 

0.1%

 

0.1% 

 

0.1% 

 

 

 

 

GBP

 

 

 

Industrial Production (MoM) 

0.0%

 

0.1% 

 

-0.3% 

 

 

 

 

GBP

 

 

 

Manufacturing Production (MoM) 

-0.7%

 

-0.2% 

 

0.9% 

 

 

 

 

GBP

 

 

 

Industrial Production (YoY) 

-1.0%

 

-1.0% 

 

-2.6% 

 

 

 

 

USD

 

 

 

Import Price Index (MoM) 

-1.0%

 

-1.0% 

 

0.0% 

   

 

 

GBP

 

 

 

NIESR GDP Estimate 

0.1%

 

 

 

-0.1% 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 Event

Forecast

Previous

Jun 13

7:15

CHF

PPI m/m

 

-0.1%

9:00

EUR

Industrial Production m/m

 

-0.3%

12:30

USD

PPI m/m

 

-0.2%

12:30

USD

Retail Sales m/m

 

0.1%

14:00

USD

Business Inventories m/m

 

0.3%

14:30

USD

Crude Oil Inventories

 

-0.1M

Jun 14

7:30

CHF

Libor Rate

<0.25%

<0.25%

7:30

CHF

SNB Monetary Policy Assessment

   

7:30

CHF

SNB Press Conference

   

8:00

CHF

SNB Financial Stability Report

   

8:00

EUR

ECB Monthly Bulletin

   

9:00

EUR

CPI y/y

 

2.4%

12:30

USD

Unemployment Claims

 

377K

12:30

USD

CPI m/m

 

0.0%

12:30

USD

Current Account

 

-124B

Jun 15

8:30

GBP

Trade Balance

 

-8.6B

12:30

USD

Empire State Manufacturing Index

 

17.1

13:00

USD

TIC Long-Term Purchases

 

36.2B

13:15

USD

Capacity Utilization Rate

 

79.2%

13:15

USD

Industrial Production m/m

 

1.1%

13:55

USD

Prelim UoM Consumer Sentiment

 

79.3

Government Bond Auctions

Date  Time  Country 

Jun 13 09:10 Italy

Jun 13 09:30 Germany

Jun 13 09:30 Swiss

Jun 13 17:00 US

Jun 14 09:10 Italy

Jun 14 09:30 UK

Jun 14 15:00 US

Jun 14 17:00 US

Silver Forecast June 12, 2012, Technical Analysis

The Monday session saw the silver markets continue the grind sideways to upwards, and this simply shows that the silver market is torn between two main driving forces in our opinion, however this isn’t exactly that original as well as it often is.

Those two forces include the inflationary and fear trade, and of course the industrial trade. The silver markets can often act as “poor man’s gold” as it is a precious metal and can move much like the gold markets. The Dollar can sometimes work against it though when it takes this role on.

On the other hand, there is the industrial trade as well. The demand for silver will certainly continue to be weak as the global economy slows down in general. The economies around the world continue to struggle, and as long as that is the case, it is very difficult to imagine a situation where silver suddenly becomes demanded by the factories around the world.

The price action lately has been very stagnant, and as a result it has been very difficult to trade this market. The hammer from the Friday session will have been triggered by the action on Monday as the highs of that session have been broken, but the fact that the candle appeared in the middle of very messy action over the last several weeks has us hesitant in going long. Also, the trend isn’t exactly supportive at this point either.

The action over the last several months has been poor at best in this market, and as a result we certainly have a downward bias in this pair. The lows have been held tight by the $27 level time and time again, and to get truly bearish, we need to see this level broken on a daily close. The $30 level above has been very resistive over the recent past, and this should continue to have this pair bouncing around in general. We are bearish overall, so the other possibility for us is to sell this pair if we get weakness on a rally. 

Silver Forecast June 12, 2012, Technical Analysis
Silver Forecast June 12, 2012, Technical Analysis

Silver Fundamental Analysis June 12, 2012, Forecast

Analysis and Recommendations:

Silver did not fare as well as gold did in today’s trading, losing over 0.13 to trade at 28.33. In early trading silver followed cue from gold and moved up but the initial gains due to the news of the Spanish bailout, may not remain intact throughout the day as they still not mentioned the way to disburse the loan. In absence of any economic releases from the globe and doubt over the funds may keep market under pressure ahead of Greece re-election on June-17.

Taking cues from fall in gold prices coupled with mixed performance in base metals, Spot silver also declined by 0.6 percent in last week. However, weakness in the DX restricted further downside in the silver prices.

On a weekly basis, holdings in the iShares Silver Trust, the world’s largest silver-backed exchange-traded fund, increased around 0.3 percent to 9,643.17 tons on 1st June 2012 from the previous level of 9,669.08 tons on 8thJune 2012.

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 weekly reports.

Economic Data June 9-10-11, 2012 actual v. forecast ( today was very lite for all of Europe and the US. The Chinese Eco data, had the most effects on the markets )

Jun. 09

 

CNY

 

 

 

Chinese CPI (YoY) 

3.0%

 

3.2% 

 

3.4% 

 

 

 

 

CNY

 

 

 

Chinese PPI (YoY) 

-1.4%

 

-1.1% 

 

-0.7% 

 

 

 

 

CNY

 

 

 

Chinese CPI (MoM) 

-0.3%

 

-0.1% 

 

-0.1% 

 

 

 

 

CNY

 

 

 

Chinese Fixed Asset Investment (YoY) 

20.1%

 

20.0% 

 

20.2% 

 

 

 

 

CNY

 

 

 

Chinese Industrial Production (YoY) 

9.6%

 

9.9% 

 

9.3% 

 

 

 

 

CNY

 

 

 

Chinese Retail Sales (YoY) 

13.8%

 

14.3% 

 

14.1% 

   

Jun. 10

 

CNY

 

 

 

Chinese Trade Balance 

18.70B

 

16.30B 

 

18.40B 

 

Jun. 11

 

JPY

 

 

 

BSI Large Manufacturing Conditions 

-5.7

 

-2.4 

 

-7.3 

 

                             

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

 Event

Forecast

Previous

Jun 12

5:45

CHF

SECO Economic Forecasts

   

8:30

GBP

Manufacturing Production m/m

 

0.9%

12:30

USD

Import Prices m/m

 

-0.5%

14:00

GBP

NIESR GDP Estimate

 

0.1%

18:00

USD

Federal Budget Balance

 

59.1B

Jun 13

7:15

CHF

PPI m/m

 

-0.1%

9:00

EUR

Industrial Production m/m

 

-0.3%

12:30

USD

PPI m/m

 

-0.2%

12:30

USD

Retail Sales m/m

 

0.1%

14:00

USD

Business Inventories m/m

 

0.3%

14:30

USD

Crude Oil Inventories

 

-0.1M

Jun 14

7:30

CHF

Libor Rate

<0.25%

<0.25%

7:30

CHF

SNB Monetary Policy Assessment

   

7:30

CHF

SNB Press Conference

   

8:00

CHF

SNB Financial Stability Report

   

8:00

EUR

ECB Monthly Bulletin

   

9:00

EUR

CPI y/y

 

2.4%

12:30

USD

Unemployment Claims

 

377K

12:30

USD

CPI m/m

 

0.0%

12:30

USD

Current Account

 

-124B

Jun 15

8:30

GBP

Trade Balance

 

-8.6B

12:30

USD

Empire State Manufacturing Index

 

17.1

13:00

USD

TIC Long-Term Purchases

 

36.2B

13:15

USD

Capacity Utilization Rate

 

79.2%

13:15

USD

Industrial Production m/m

 

1.1%

13:55

USD

Prelim UoM Consumer Sentiment

 

79.3

Gold and Silver during the “new” EU crisis – part IIl

Expectations were in line as the European finance ministers decided to lend 100billion euros to its fourth largest economy to prevent the banking meltdown. The deal triggered a rally in riskier assets in early hours while the euro staged its rally against the dollar.

Gold also fared well by trading over 0.35% at the at present moment. Yet, the EU ministers did not make clear whether the European Stability Mechanism, or the temporary European Financial Stability Facility, will disburse the loan. While the ESM will be preferred because of paid-in capital but the EFSF may not be a preferred creditor because of collateral demand for using the fund in advance.  The problem arises, as to actually if there is enough funds to cover the Spanish bailout. The EFSF, does not have the funds secured to cover Spain and the EFSF is scheduled to be phased out and replaced by the ESM, which has not been ratified at this time and still cannot raise funds. It’s a catch 22 situation, as EU leaders want to complete the transaction before the Greek elections.

It is not a balancing act, but more like a ponzi scheme, as Spain is one of the largest economies it is also one of the largest providers to the EFSF and ESM and have not at this time provided the funding to the funds, the question arises how can Spain honor its commitments if it has to borrow funds

Markets should be cautious that the optimism may be temporary given that the European crisis has hassled market over two years and especially extra cushion should be taken ahead of Greek election on June 17. Beyond this, market expectations will be scattered for the big items like G-20 meeting, the EU Summit and the Fed’s rate decision. Each of these days would be well anticipated and would carry extreme fear for melting down financial situation or a dishearten stimuli which could depress buying opportunity. In absence of any economic releases for the day, market is therefore expected to stay elevated as the Europe and US are still to face it. But, as discussed, market anxiety still remains since there is no indication for a proper channel through which the fund will be laid out. We therefore recommend staying short for the metal from higher levels

Silver futures prices are also trading at a positive note taking cues from the Spanish bail out news. The Asian equities are also trading at a firm note while the Euro got a firm footing against the dollar and thereby supporting the market. But as discussed in gold’s above, the initial gains due the news may not remain intact throughout the day as they still not mentioned the way to disburse the loan. In absence of any economic releases from the globe and doubt over the funds may keep market under pressure ahead of Greece re-election on June-17. Hence, silver is also likely to pare gains as the day progress. So, we recommend staying short for the metal at higher prices.

Silver Forecast June 11, 2012, Technical Analysis

The silver markets fell for much of the Friday session, but as per usual, the Americans came in and bought everything up. The real move could have been short covering, but the candle at the end of the day is the same result – a hammer. The $30 level above is still the hurdle that the bulls will have to get over, and as a result we aren’t willing to buy quite yet. A daily close above the $30 level is enough for us to buy though. As for the downside, it looks to be pretty messy all the way down to the $27 level, and we won’t sell until we are below that level. 

Silver Forecast June 11, 2012, Technical Analysis
Silver Forecast June 11, 2012, Technical Analysis

Silver Forecast for the Week of June 11, 2012, Technical Analysis

The silver markets has a fairly volatile five sessions as the world tries to solve the idea of what is going on in Europe, China, and the United States. While the Dollar rising in value can work against the value of silver in general, the fact that silver is used for so many industrial applications makes this market a bit more difficult than gold to gauge at times. On one hand, the Dollar fell for the session on Friday, but one still has to be leery of the industrial demand for silver and other such commodities.

The demand for silver will certainly be under assault as the Chinese are slowing down, and the Europeans are going into a hard recession in some countries. Simply put, there won’t be a lot of trade going on. With the problems in Europe, we suspect that there will be a somewhat continued move into the US dollar, and this will continue to weigh upon the precious metals complex. The $30 level looks to be our “trigger point”, meaning that the market is a screaming buy above that level for us. On a daily close, we would be long.

However, looking at the other side of the trade, there is the $27 level that would have us aggressively selling silver as it would show another leg down in this market. The move down would probably be fairly brutal at that point as the momentum will certainly have shifted to the downside at that point.

The market is essentially stuck in a $3 range for our money, and as a result we may be flat for some time. However, once one of those levels gets broken, it will become obvious to many that the market is getting ready to move again. As this market can move rather wickedly once it makes up its mind, it is probably best to wait until the signal is obvious before getting involved.

While there are some who will choose to trade within this range, we wish them well. The volatility in silver at the moment is far too strong for us to risk our capital on.

Silver Forecast for the Week of June 11, 2012, Technical Analysis
Silver Forecast for the Week of June 11, 2012, Technical Analysis

Silver Weekly Fundamental Analysis June 11-15, 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 tracked gold most of the week and responded directly to the value of the greenback. The pair closed the week at 28.453 as shown below.

Date

Last

Open

High

Low

Change %

Jun 08, 2012

28.453

28.642

28.648

27.913

-0.67%

Jun 07, 2012

28.645

29.420

29.665

28.362

-2.65%

Jun 06, 2012

29.425

28.480

29.868

28.475

3.31%

Jun 05, 2012

28.483

28.270

28.543

28.083

0.74%

Jun 04, 2012

28.273

28.330

28.598

27.958

-0.17%

Equities took cues from the US markets and in response to the surprise rate reduction in China. and thereby trading well below prior closing despite Japan GDP beats the estimates at early morning. The Euro also fell after Fed indicated severe risk is emanating from the Europe to US. Hence, silver is exposed to a further downside for the day. Bernanke’s comment may be proved today when reports from Germany indicate narrowing down current account and trade balance. However, the US trade balance may reduce its trade deficit as dollar has been appreciating significantly from April. Overall, market sentiment seems to remain weak with more pressure mounting from the Greek re-election on June 17th. And hence Silver may remain under pressure and we recommend staying short for the metal

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 June 4 – 8 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

 Event

Actual

Forecast

Previous

Jun 5

USD

ISM Non-Manufacturing PMI

53.7

53.6

53.5

GBP

Construction PMI

54.4

54.5

55.8

Jun 6

EUR

Minimum Bid Rate

1.00%

1.00%

1.00%

CHF

Foreign Currency Reserves

303.8B

 

237.6B

Jun 7

CHF

CPI m/m

0.0%

0.1%

0.1%

GBP

Services PMI

53.3

52.6

53.3

EUR

Spanish 10-y Bond Auction

6.04|3.3

 

5.74|2.4

GBP

Asset Purchase Facility

325B

325B

325B

GBP

Official Bank Rate

0.50%

0.50%

0.50%

USD

Unemployment Claims

377K

381K

389K

GBP

PPI Input m/m

-2.5%

-1.2%

-1.4%

Jun 8

USD

Trade Balance

-50.1B

-49.4B

-52.6B

Historical:

Highest: 49.813 on Apr 25, 2011

Average: 27.592 over this period.

Lowest: 14.655 on Feb 05, 2010

 

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

Date

Time

Currency

 Event

Forecast

Previous

Jun 11

6:45

EUR

French Industrial Production m/m

 

-0.9%

23:01

GBP

RICS House Price Balance

 

-19%

Jun 12

5:45

CHF

SECO Economic Forecasts

   

8:30

GBP

Manufacturing Production m/m

 

0.9%

14:00

GBP

NIESR GDP Estimate

 

0.1%

Jun 13

7:15

CHF

PPI m/m

 

-0.1%

9:00

EUR

Industrial Production m/m

 

-0.3%

Jun 14

7:30

CHF

Libor Rate

<0.25%

<0.25%

7:30

CHF

SNB Monetary Policy Assessment

   

7:30

CHF

SNB Press Conference

   

8:00

CHF

SNB Financial Stability Report

   

8:00

EUR

ECB Monthly Bulletin

   

9:00

EUR

CPI y/y

 

2.4%