Silver gained more than gold, especially after losses on the penultimate day when this white metal was the only loser. Silver futures tracked gains in gold and other base metals. Silver for September delivery on Comex recovered by more than 1% to $17.62/oz and the base metals index on LME (LMEX) also gained more than 1%.

Facts:

The greenback fell to a three-month low against a basket of six major currencies after reports showed a decline in initial jobless claims but rising continuing claims suggested that recovery in the US job market may be slow.

The Euro also gained as much as 0.9% against the US dollar, topping $1.31 for the first time in almost three months, on speculation that Europe’s recovery could be faster than expected.

Reports showed various confidence measures improved in the Euro zone and German unemployment rate fell to 7.6% from 7.7%.

The benchmark MSCI index for world stocks closed 0.1% down, mainly driven by lowering US stocks. Ishares silver trust maintained its silver holdings at 9185.29 MT yesterday.

MCX silver futures for September month were marginally changed at Rs. 28,271/kg yesterday, though it moved by more than Rs. 200 during intra-day trading.

Outlook

Silver is slightly down at $17.59/oz in Asia as Asian equities are weakening after the Wall Street closed lower yesterday and negative industrial production data from Japan. Silver may remain lower initially in line with gold and weak equity markets. Investors will also abstain from taking a decisive stand before the release of the US second-quarter economic growth data in the evening. However, silver is expected to track gold higher for the day.

Courtesy: Karvy Commtrade Ltd.

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