Silver futures edge higher with Fed outlook in focus

New York (Oct 24)  Silver prices were higher on Thursday, as investors awaited the release of key U.S. economic data to gauge when the Federal Reserve will starting trimming its asset purchase program.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD22.68 a troy ounce during European morning trade, up 0.2%.

Silver prices traded in a range between USD22.51 a troy ounce, the daily low and a session high of USD22.78 a troy ounce.

The December contract rallied to USD22.83 a troy ounce on Tuesday, the strongest level since September 20, before settling at USD22.79 a troy ounce, up 2.3%.

Silver prices were likely to find support at USD21.87 a troy ounce, the low from October 21 and resistance at USD23.07, the high from September 20.

The December contract ended 0.76% lower on Wednesday to settle at USD22.61 a troy ounce.

The U.S. was to produce data on initial jobless claims and new home sales later Thursday.

Official data released earlier in the week showed that the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.

The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August, but this was partially due to more people dropping out of the labor force.

Silver traders 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 start reducing stimulus.

Prices of the precious metal have largely tracked shifting expectations as to whether the Fed would start tapering its USD85-billion-a-month asset-purchase program by the end of the year.

The central bank is scheduled to meet October 29-30 to review the economy and assess policy.

Elsewhere on the Comex, gold for December delivery inched up 0.15% to trade at USD1,336.00 a troy ounce, while copper for December fell 0.15% to trade at USD3.262 a pound.

A strong initial economic indicator for China failed to offset pessimism over its economy.

China’s HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.

However, sentiment remained weak amid concerns over a cash crunch in the Chinese financial system after interbank lending rates moved higher for a second day.