IV:Silver futures drop 2% as stronger dollar leads to profit-taking
Investing.com - Silver futures fell on Thursday, as a broadly stronger U.S. dollar prompted investors to book profits from a sharp rally that took prices to the highest level since April on Wednesday.
On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD23.95 a troy ounce during European morning trade, down 2%.
The December contract settled 1.05% lower at USD24.43 a troy ounce on Wednesday, after hitting USD25.16 a barrel, the highest level since April 12.
Silver prices were likely to find support at USD22.88 a troy ounce, the low from August 23 and at USD25.16, Wednesday’s high.
Silver futures are up 24% since hitting a three-year low of USD18.19 on June 28, placing it firmly in bull-market territory.
Silver prices struggled for upside traction due to a slightly stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
The dollar index, which tracks the performance of the greenback aganst a basket of six other major currencies, was up 0.45% to trade at 81.81, the highest level since August 15.
Market participants remained cautious amid concerns over an impending U.S.-led military strike against Syria, following the alleged use of chemical weapons.
On Wednesday, President Barack Obama said the U.S. has concluded that the Syrian government carried out a chemical weapons attack near Damascus, but added that he had not yet made a decision about whether to intervene militarily.
Meanwhile, the U.S. was to publish revised data on second quarter growth and the weekly report on initial jobless claims, which will be scrutinized for its potential impact on the Federal Reserve's monetary policy stance.
Uncertainty over the timing of a reduction in the Fed’s bond-buying program continued after data showed that U.S. pending home sales fell unexpectedly in July.
Industry data showed that U.S. pending home sales declined 1.3% last month, more than the expected 0.5% fall, after a 0.4% loss the previous month.
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 central bank is scheduled to meet September 17-18 to review the economy and assess policy.
Elsewhere on the Comex, gold for December delivery lost 0.8% to trade at USD1,407.30 a troy ounce, while copper for December shed 0.25% to trade at USD3.304 a pound.
