Silver futures edge higher ahead of Federal Reserve meeting

Investing.com - Silver futures inched higher during European morning hours on Tuesday, as traders looked ahead to the outcome of the Federal Reserve’s policy-setting meeting on Wednesday.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD22.06 a troy ounce during European morning trade, up 0.3%. The December contract ended up 1.3% at USD22.00 a troy ounce on Monday.

Silver prices held in a range between USD21.75 a troy ounce, the daily low and a session high of USD22.12 a troy ounce.

Silver prices were likely to find support at USD21.42 a troy ounce, the low from September 13 and resistance at USD23.19, the high from September 12.

Market analysts expected the Fed will start cutting monthly bond purchases by USD10 billion to USD75 billion when it concludes its two-day policy meeting on Wednesday.

Monthly purchases of Treasuries will be scaled back by USD10 billion to USD35 billion, while mortgage-bond buying will remain unchanged at USD40 billion.

Silver prices rallied on Monday after former U.S. Treasury Secretary Lawrence Summers bowed out of the race to succeed Ben Bernanke as the next chairman of the U.S. central bank.

Summers’ was perceived as being likely to unwind economic stimulus measures more aggressively than the other main contender for the post, current Fed Vice Chairwoman Janet Yellen.

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

The precious metal is on track to post a loss of nearly 28% on the year as traders bet an improving U.S. economy would lead the Fed to unwind its stimulus program by the year's end.

Elsewhere on the Comex, gold for December delivery inched up 0.3% to trade at USD1,322.00 a troy ounce, while copper for December added 0.15% to trade at USD3.227 a pound.