Silver future also drifted lower along with gold and equities after reports flashed the possible threat of down gradation of 15 Euro nations by the S&P.
The immediate delivery future fell near a percent; while rupee depreciation helped MCX prices to settle 0.62% below prior level.
The US stocks gained yesterday but the day’s rally was dampened by the news Germany and other top-rated European nations could see their credit ratings cut
The dollar index settled slightly lower after their retail sales and non manufacturing fell below expectation
The I-share silver holdings fell to 9702.56 tons from 9706.54 tons as on 2nd Dec
OUTLOOK:
At the Globex, silver is seen trading down by $0.252 at 32.12. As we have discussed in Gold’s outlook, the Asian equities rattled after the S&P threaten 15 Euro nations for a probable down gradation. Euro declines on fear of Germany, the top rated Euro nation, faced the risk of down grade.
France and Germany agreed a master plan involving treaty change on Monday to impose budget discipline across the euro zone as S&P piled on pressure for a rapid solution to the EU debt crisis.
A tougher rule for the Euro nation is certainly better for the economy but, at present it might hurt the currency. From the economic data front, the Euro zone GDP might not accelerate at a faster pace as the government expenditure is likely to fell.
So, Euro may remain under stress for the day. Silver therefore is also expected to remain weak on the back of weak equities and Euro. Hence, we recommend remaining short for the metal for the day.
Courtesy: Karvy Commtrade Ltd.
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