Silver may be poised for solid gains in 2012

Silver may be poised for solid gains in 2012 after a poor showing in 2011 and strong demand for the metal, said optionsXpress in a research note.

“Technically, the (Comex) March Silver contract has made significant progress, but prices need to sustain rallies above $35 to keep the rally going,” optionsXpress added.

Silver has been one of the strongest commodities during January. “Oversold conditions and increased demand from industrial users of the metal have contributed to the rebound,” OptionsXpress said.

“Investors have also become a bit numb to the financial crisis gripping Europe, and they appear to be less convinced that the worst-case scenario is a real possibility. Silver has also ridden the coattails of the Gold market, which has performed well as an inflation play. Silver traders also got a boost from the FOMC, which forecast interest rates to remain at extremely low levels for the next 2-3 years, stoking some inflation fears,” OptionsXpress said.

Further, there are expectations for lower interest rates in China that could Lead to buying of raw materials, including base metals and silver, OptionsXpress conluded – CommodityOnline

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Posted by Silver Guru on Feb 1 2012. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry