Gold has been more stable than silver and will always considered as hedge against inflation and safe haven asset in financial crises such as prevailing in Euro zone.
Following are the factors responsible for silver meltdown from top:-
> Rise in the Chinese inflation rate cast doubt over ongoing demand for commodities.
> Commodity funds exiting silver as it reached their target level.
> Futures exchanges increased their margin requirements on certain commodities including oil and silver.
> The major silver Exchange Traded Funds reported redemptions totaling 1,040 tons in the first week of May, an amount equivalent to about 40% of the silver inflow throughout the whole of 2010.
Fundamental calls in Gold and Silver
MCX Gold (August)
Investors can take long position in Gold (August) in range of Rs 22,500-22,560 for target of Rs 23,000-23,100 with stop loss of closing below Rs 22,250.
MCX Silver (July)
Investors can take long position in Silver (July) in range of Rs 53,500-54,200 for target of Rs 58,000-60,000 with stop loss of closing below Rs 51,500.
