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VIEW ON PRECIOUS METALS [SILVER]

07-02-2012.

 

Silver prices have made gains over recent statements by the Federal Reserve would keep interest rates near Zero Levels until 2014. Prices stalled after surprising robust US jobs data bolstered investors’ risk appetite and stabilized the prices.

 

Silver has been the star performer as of now in the 2012, Silver bets increased by 17% to 18702 contracts and also Silver holdings rose for a fifth week as per latest CFTC report.

On a relative basis to gold it has outperformed quite strongly, with the ratio once again approaching 50 ounce of silver to 1 ounce of gold from recent high of 57.4.

 

A report released by the Silver Institute forecasted that industrial fabrication would increase by 37 percent between 2010 and 2015; a potential increase from approximately 488 million ounces (m/oz) to 666 m/oz. This continues to be a positive fundamental because there are both established and emerging applications for the metal.

 

Technicals:

 

COMEX Silver March delivery currently trading at $ 33.70 per OZ, touched 2012 high of 34.39 on 3rd feb-12.

In the New Year Silver prices started with bullish note and gained above 20% till date, 18.87% in January month itself.

As shown in weekly chart the silver prices are still in the downtrend under consolidation phase in a larger triangle with strong resistance at $ 35 levels i.e. 61.8% Fibonacci Retracement. We may see $ 38 levels only in the case of breaking crucial levels of $ 35.

We have seen strong rally after a double bottom pattern formation, touched twice $ 26.15 in the month of Sept & Dec 11.

Technically it will find resistance towards $ 35 per ounce, which is the resistance by the trend-line from the 2011 high.

 

Support 1:     $ 29        support 2:      $ 26.15

Resistance 1: $ 35        Resistance2:  $ 38

Expected short term range:$ 29 - $ 38

 

 

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