Silver futures jump more than 1% as dollar weakens
London (Nov 6) Silver prices were higher on Wednesday, as a broadly weaker U.S. dollar boosted the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD21.93 a troy ounce during European morning trade, up 1.4%.
Silver prices traded in a range between USD21.62 a troy ounce, the daily low and a session high of USD22.02 a troy ounce.
The December contract fell to USD21.56 a troy ounce on Tuesday, the lowest since October 17, before ending 0.29% lower at USD21.63 a troy ounce.
Futures were likely to find support at USD21.10 a troy ounce, the low from October 17 and resistance at USD22.62, the high from October 31.
Silver’s gains came as the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.25% to trade at 80.60, the lowest since November 1.
A weaker dollar increases demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.
Market players now looked ahead to the release of key U.S. economic data later in the week to help assess the timing for a reduction in the Federal Reserve’s bond-purchasing program.
The U.S. is set to release preliminary data on third quarter economic growth on Thursday, while October’s highly-anticipated nonfarm payrolls report is scheduled for Friday.
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 reduce its bond purchases.
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.
Elsewhere on the Comex, gold for December delivery rose 0.7% to trade at USD1,317.50 a troy ounce, while copper for December added 0.45% to trade at USD3.273 a pound.