Silver also rallied for a consecutive third week, surpassing gold amid strong global equities and optimism over the Greek debt deal. The immediate delivery future rallied 7% at the COMEX while at MCX gain was little lesser due to the rupee appreciation.
Global equities remained strong as World equities measured by the MSCI all country world indexes, posted a 5th weekly gain of 2.88% while the Asian benchmark index rose 3.29%. On the other hand, the CRB Index, a bellwether for commodities advanced by 0.72%
The Euro revived smartly after a successful French debt auction, shrugging off down grades by S&P. Dollar index slid by 1.67% despite the economic releases showed improving economic recovery
The I-share silver holding remained unchanged at 9516.75 tons as on Jan.20
OUTLOOK:
Silver is also seen quoting positive at the Globex with Asian equities marching upward amid optimism of improving US economic recovery. As we have discussed in Gold’s outlook, EU finance chiefs meeting should be keenly watched after they have struck to confirm the deal with Greek investors. In an agreement parties are likely to swap old binds for new securities with coupons averaging 4-4.5%.
Germany and IMF however are insisting on an agreement closer to 3%. Euro is therefore weakening against the dollar at present moment.
However, we expect silver to continue rally amid optimism of a Fed stimuli to come up along with a successful Greek swap deal. Hence, we recommend remaining long for the metal.
Courtesy: Karvy Commtrade Ltd.
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