Silver futures rally 1% ahead of FOMC announcement

London (Oct 30)  Silver prices rallied 1% on Wednesday, as investors eyed the outcome of the Federal Reserve's policy meeting later in the day, amid expectations the central bank will hold off on scaling back monetary 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.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD22.71 a troy ounce during European morning trade, up 1%.

Silver prices traded in a range between USD22.38 a troy ounce, the daily low and a session high of USD22.75 a troy ounce.

The December contract ended 0.2% lower on Tuesday to settle at USD22.49 a troy ounce.

Futures were likely to find support at USD22.26 a troy ounce, the low from October 25 and resistance at USD22.88, the high from October 24.

The Fed is scheduled to conclude its two-day policy-meeting later Wednesday, with market analysts expecting the central bank to keep its USD85 billion-a-month asset-purchase program on track in order to safeguard the faltering economic recovery.

Data released on Tuesday showed that U.S. consumer confidence dropped to a six-month low of 71.2 in October from a reading of 80.2 in September, as concerns over the U.S. government shutdown and the debt ceiling crisis weighed.

The U.S. was to release data on private sector payrolls later Wednesday, ahead of the U.S. employment report for October, due for release on November 8.

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.

Elsewhere on the Comex, gold for December delivery inched up 0.2% to trade at USD1,347.80 a troy ounce, while copper for December added 1% to trade at USD3.310 a pound.