Silver futures under pressure as Fed stimulus uncertainty weighs
Investing.com
Published Sep 24, 2013 04:43AM ET
On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD21.61 a troy ounce during European morning trade, down 1.1%.
Silver prices fell by as much as 1.4% earlier in the day to hit a session low of USD21.54 a troy ounce. The December contract ended down 0.3% at USD21.85 a troy ounce on Monday.
Silver prices were likely to find support at USD21.22 a troy ounce, the low from September 18 and resistance at USD23.07, the high from September 20.
New York Fed President William Dudley said Monday that a “very accommodative monetary policy” is still needed to support the U.S. economy.
Dudley, who voted against tapering the central bank’s USD85 billion monthly bond buying program last week, added that adjustments to the Fed’s asset purchase program "need to be anchored in an assessment of how the economy is actually performing”.
Dudley’s comments added to confusion regarding the duration of the Fed’s stimulus program after St. Louis Fed President James Bullard said last Friday that a small tapering of bond purchases is “possible” at the Fed’s October meeting.
The Fed will hold its next monetary policy meeting on Oct. 29-30.
Silver prices soared by 8% on September 18 after the Fed decided to leave its USD85 billion-a-month stimulus program unchanged. The decision surprised markets, which had been expecting the central bank to taper its monthly stimulus program by USD10 billion to USD15 billion.
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 29% 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 shed 0.5% to trade at USD1,320.40 a troy ounce, while copper for December fell 0.9% to trade at USD3.270 a pound.
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Written By: Investing.com
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