IV:Silver futures inch lower amid Fed tapering concerns
Investing.com - Silver futures inched lower on Tuesday as investors re-examined expectations on how soon the Federal Reserve may start to pull back its asset purchase program following strong U.S. service sector data on Monday.
Moves in the silver price 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 September delivery traded at USD19.65 a troy ounce during European morning trade, down 0.3%.
Silver futures held in a tight trading range between USD19.52 a troy ounce, the session low and a daily high of USD19.73 a troy ounce.
Silver prices were likely to find support at USD19.18 a troy ounce, the low from August 2 and resistance at USD20.18, the high from July 29.
The September contract settled down 0.95% at USD19.72 a troy ounce on Monday after data showed that activity in the U.S. services sector expanded at the fastest rate in five months in July.
The Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 56.0 from a three year low of 52.2 in June, as new orders jumped.
The data help offset the latest U.S. jobs report which showed that the U.S. economy added 162,000 jobs in July, less than the 184,000 increase forecast by economists.
Investors 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.
Any improvement in the U.S. economy was likely to reinforce the view that the U.S. central bank will begin to taper its bond purchase program in the coming months.
Silver prices are on track to post a loss of almost 34% on the year, amid speculation the Fed will start to unwind its bond purchasing program in the coming months.
Elsewhere on the Comex, gold for December delivery fell 0.9% to trade at USD1,290.35 a troy ounce, while copper for September delivery added 0.3% to trade at USD3.178 a pound.
Copper traders looked ahead to data scheduled for later in the week on China’s trade balance as well as a report on inflation and industrial production, amid ongoing concerns over the Asian nation’s economic outlook.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
