Silver Prices Decline Amid Dollar Rebound; Central Banks Eyed

London (July 19)  Silver prices edged slightly lower on Wednesday, as the market locked in two weeks’ worth of gains.

September silver futures were down 7 cents, or 0.4%, at $16.20 a troy ounce at 7:32 a.m. ET. Prices fluctuated between $16.13 and $16.29 overnight.

 The grey metal dipped slightly on Tuesday, snapping a three-day winning streak. Prices continue to trade near multi-week highs as part of a broader correction from the July 7 low.

Gold prices were also down through the early morning session, with the August futures contract slipping 0.2%, to $1,239.40 a troy ounce. Like silver, gold bullion has rebounded sharply in recent weeks from multi-month lows.

Gold’s premium over silver has declined sharply in recent weeks to reach 76.51 on Tuesday. That was the lowest level since July 6.

Despite the recent advances, silver remains highly vulnerable to further corrections. Demand for precious metals remains vulnerable even as the U.S. dollar continues to make gold and silver more affordable to foreign buyers.

The greenback rose against a basket of world currencies Wednesday after plunging to 11-month lows during the previous session. The dollar index (DXY) was last up 0.2%.

There were no major economic releases scheduled in the European session. The spotlight shifts to monetary policy in the latter half of the week, with the Bank of Japan (BOJ) and European Central Bank (ECB) scheduled to deliver rate verdicts. No changes are expected on either front.

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