Silver Fundamental Analysis May 8, 2012, Forecast

By:

Updated: Jan 1, 2011, 00:00 GMT+00:00

Analysis and Recommendations: Silver taking cues from fall in gold prices coupled with strength in the US dollar index, silver prices in the international

Silver Fundamental Analysis May 8, 2012, Forecast

Analysis and Recommendations:

Silver taking cues from fall in gold prices coupled with strength in the US dollar index, silver prices in the international markets have dropped sharply by 3 percent last week. Silver being an industrial metal also took cues from downside in base metals pack. Silver is trading at 30.13 having dropped in today’s session below 30.00

Unfavorable economic data from the US and Euro Zone front coupled with weak sentiments in the global markets exerted downside pressure on the base metals pack on the LME last week. US non-farm employment change increased less than expected which escalated concerns over economic growth in the world’s largest economy. Additionally, strength in the US dollar index also acted as a negative factor for metal prices.

Rise in risk aversion in the global markets due to escalating concerns with respect to Euro Zone debt worries will lead to strength in the US dollar today. Taking cues from this, we expect gold and silver to trade lower today. However, depreciation in the Rupee may cushion sharp downside on the domestic bourses.

Economic Releases May 7, 2012 actual v. forecast

AUD	Building Approvals (MoM)	7.4%	3.1%	-8.8%
AUD	NAB Business Confidence	4		3
AUD	Retail Sales (MoM)	0.9%	0.2%	0.3%
CHF	Unemployment Rate	3.1%	3.1%	3.0%
CHF	CPI (MoM)	0.1%	0.2%	0.6%
EUR	German Factory Orders (MoM)	2.2%	0.5%	0.6%
CAD	Building Permits (MoM)	4.7%	-1.5%	7.6%