Silver futures hold steady as Fed taper concerns remain
New York (Dec 23) Silver prices swung between small gains and losses on Monday, as concerns over the impact of the Federal Reserve’s decision to begin tapering its stimulus program next month continued to weigh.
On the Comex division of the New York Mercantile Exchange, silver futures for March delivery traded at USD19.42 a troy ounce during European morning trade, down 0.15%. Comex silver prices traded in a range between USD19.26 a troy ounce and USD19.48 a troy ounce.
Futures were likely to find support at USD19.10 a troy ounce, the low from December 19 and resistance at USD19.90, the high from December 19.
Silver prices settled 1.39% higher on Friday to end at USD19.45 a troy ounce, as investors returned to the market to seek cheap valuations in wake of recent losses.
Comex silver prices plunged by 4.4% last Thursday, as investors liquidated positions after the Fed announced plans to begin tapering its monthly bond-buying program by USD10 billion in January.
Some market participants believe the Fed will likely reduce its bond purchases by USD10 billion in each of its next seven meetings before ending the program in December 2014, amid indications of an improving U.S. economy.
The Commerce Department said Friday that the U.S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth, adding to signs that the economic recovery is deepening.
Also, the International Monetary Fund on Sunday raised its forecast for 2014 U.S. economic growth to 2.5%, up from the 1.6% it expects the country to grow this year.
IMF Managing Director Christine Lagarde said on NBC’s “Meet the Press” said that the recent budget deal in Washington and the Federal Reserve’s decision to taper its bond buying program eased doubts about the future.
Silver is down approximately 37% this year, as solid U.S. economic data underlined expectations the Fed will begin curbing stimulus.
Elsewhere on the Comex, gold futures for February delivery traded at USD1,199.60 a troy ounce, while copper for March delivery inched up 0.1% to trade at USD3.310 a pound.
