Silver: Bullish Momentum to Continue
Source: TheStreet, Karvy Global (8/9/10)
"Silver is supported by technical indicators and a weak dollar."
A weak dollar will continue to spur the demand for silver, along with the yellow metal. Silver could see some lively sessions this week on the Fed's decision to ease money supply, thus undermining confidence in the U.S. dollar.
Meanwhile, European macroeconomic fundamentals are expected to improve, as indicated by the 1.7% expansion in Germany's GDP growth in the second quarter. Trade surplus and current account surplus could improve further, strengthening the euro against the dollar.
Among data releases scheduled for the week, China's economic data in the form of rising inflation, lower industrial production and retail sales, narrowing trade surplus and declining new consumer loans may knock the markets. Safe haven demand for silver and gold will likely improve, boosting silver prices.
Last week, COMEX silver futures for September delivery climbed as high as $18.70 an ounce before retreating, but gained 2.6% to close at $18.40. Silver prices breached and sustained above the two-week range bound mode. Silver was in white opening Morubozu candlestick formation, indicating the bullish trend in prices. The weekly RSI (14) is at 0.53, signaling continuation of the uptrend.