NEW YORK (TheStreet) -- Silver is expected to remain bullish this week, supported by technical indicators, a weak dollar and weaker China economic data.

The bearish pattern in the dollar will likely continue from the past week, but could be limited this week due to the Michigan confidence index, falling jobless claims, and rising retail sales. 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.

Past week, silver tracked gold to close at $18.47 per ounce. The initial surge in base metals' prices drove silver prices higher, but the correction in base metals toward the end of the week led silver to pare some of the gains. Base metals index on the LME (LMEX) was up 1.9% last week. Equity markets also ended positive with a few jerks during the week. The benchmark MSCI world index for stocks gained nearly 2.5%.

The gold-silver ratio fell to 65.15 from 65.64. Meanwhile, silver prices for spot delivery on the COMEX closed at $18.47 per ounce, while futures ended at $18.47 per ounce, suggesting that silver prices are in neither backwardation nor contango. Whereas, COMEX gold prices for spot delivery closed at $1205.4 per ounce, while futures ended at $1204.1 per ounce, indicating that gold prices are in backwardation.

The calendar spread, difference between two futures contracts, between silver Sept. 2010 and Dec. 2010 continued to remain thin at -0.06, signifying that the far month contracts closed higher than the near month contracts. Meanwhile, the calendar spread between gold Oct. 2010 and Dec. 2010 contracts closed at -1.20 in the past week.

Among major silver producers, Mag Silver ( MVG), Coeur d'Alene Mines ( CDE), Endeavour Silver ( EXK) and our top silver stock pick for the past few months Silver Wheaton ( SLW) were up 11.9%, 7.2%, 5.7% and 5.2%, respectively last week.

Among others, Silver Standard Resources ( SSRI), Hecla Mining ( HL), Pan American Silver ( PAAS) were up 4.2%, 3.6% and 3.6%, respectively. Meanwhile, Compania de Minas Buenaventura ( BVN) declined 5.6% last week.

Karvy Global Services (www.karvyglobal.com), a subsidiary of the Karvy group (www.karvy.com), provides specialized research in asset classes including stocks, mutual funds and insurance to leading Wall Street firms.

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