Silver futures ease down with September taper in focus

Investing.com - Silver futures edged lower on Monday, as investors continued to speculate over the timing of the Federal Reserve’s widely expected reduction in monthly bond purchases.

Moves in silver prices this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD23.82 a troy ounce during European morning trade, down 0.3%.

Silver prices traded in a range between USD23.70 a troy ounce, the session low and a daily high of USD24.13 a troy ounce. The December contract settled 2.75% higher at USD23.89 a troy ounce on Friday.

Silver prices were likely to find support at USD23.08 a troy ounce, the low from September 6 and resistance at USD24.52, the high from September 3.

Uncertainty over whether the Fed will start tapering its USD85 billion-a-month asset purchase program later this month mounted after data showed that the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.

The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.

The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.

The disappointing data saw investors reassess expectations over the timing of a pullback in the Federal Reserve’s stimulus program.

Silver traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.

The central bank is scheduled to meet September 17-18 to review the economy and assess policy.

Elsewhere on the Comex, gold for December delivery was little changed to trade at USD1,386.90 a troy ounce, while copper for December added 0.7% to trade at USD3.285 a pound.

The red metal moved higher following the release of upbeat Chinese and Japanese economic data.

The Chinese National Bureau of Statistics said earlier that consumer price inflation rose 2.6% in August, in line with expectations and slowing from 2.7% in July.

The inflation report came one day after data showed that China’s trade balance widened more-than-expected in August, easing concerns over a slowdown in the world’s second-largest economy.

Official trade data released on Sunday showed that China’s trade surplus widened to USD28.6 billion from a surplus of USD17.8 billion in July, compared to estimates for a surplus of USD20 billion.  

Chinese exports rose 7.2% from a year earlier in August, beating expectations for a 6% increase and following a 5.1% gain in July.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Meanwhile, in Japan, data showed that Japan’s economy grew by a seasonally adjusted 3.8%, well above the prior estimate of growth of 2.6%.

Sentiment was also boosted after Tokyo was chosen Saturday by the International Olympic Committee to host the 2020 Summer Olympics, beating Istanbul and Madrid.