Monday, December 19, 2011

Silver Prices in 2012

Silver prices may witness moderately bullish trends in 2012 on global macro-economic uncertainties and possible fall in industrial demand for the commodity. Investment demand may gain especially in India where the demand usually comes from farmers and rural households who store their savings in Silverbangles and coins. Depreciating rupee may weaken demand for precious metals as import costs rise. Higher prices may act as deterrent for buying in India. In 2010, silver futures have outperformed all base metals and bullion commodities giving a return of 73%. Current market prices are trading in range of 55000-57000 rupees per kilogram in India. Silver is also having direct relationship with Euro and inverse relationship with US dollar, as the movement of EURO is generally moving in negative direction with US dollar and most of the other currencies, we may face zig zag movement in the prices of silver. MCX Silver will trade positive at 58526 levels in the coming weeks could rise to Rs 64000 per kg by February if it breaks Rs 60,000 levels or else it could fall to Rs 46000. Silver futures climb to more than 56 percent to 73600 rupees per kilogram. After touching all time high levels, Silver dips to 46000 rupees as Euro zone debt crisis fear market condition. Silver move downside along with base metal complex. Overall view for Silver is moderately bullish for coming year. Short term bearishness can be considered as buying opportunity to buy this white metal at dip. As the world economy worsens, its affects Industry demand for Silver. In case, down-trend continus, then Silver may touch bottom levels of 48000 and 42000 rupees in coming months. Supportive micro economical data will help Silver to move higher till 62000. Looking at the current market, we don’t expected much space in upper range for now.