Silver May Witness Down Resistance At 42264
CommodityOnline | Apr 22, 2014 05:35AM ET
Silver settled down -0.83% at 42027 slid in tandem with losses in gold and platinum group metals. Due to Monday's drop, silver has reversed its gains and is lower on the year. In Ukraine, an agreement reached last week to avert wider conflict was faltering as the new week began, with pro-Moscow separatist gunmen showing no sign of surrendering the government buildings they have seized.
However, no new violence was reported Monday. In the U.S. earlier, the Conference Board reported earlier that its index of leading indicators, which measures future economic activity, increased 0.8% in March after a 0.5% rise in February, beating expectations for a 0.7% reading. Elsewhere, the Chicago Fed National Activity Index decreased to 0.20 in March from 0.53 in February, in line with expectations.
The numbers reminded investors that even though the timing of rate hikes in the U.S. remains unclear, the Federal Reserve remains on track to continue tapering its monthly bond-purchasing program this year as the economy recovers. Fed bond purchases, currently standing at $55 billion a month, weaken the dollar by suppressing interest rates, making gold an attractive hedge while such policies remain in effect.
Technically market is under long liquidation as market has witnessed drop in open interest by -2.01% to settled at 14369 while prices down -350 rupee, now Silver is getting support at 41774 and below same could see a test of 41522 level, and resistance is now likely to be seen at 42264, a move above could see prices testing 42502.
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