Silver futures recover from early losses to rally 3%
LONDON (Sept 2) Silver futures recovered from early losses to move sharply higher on Monday, after data from China signaled an improvement in the country’s manufacturing sector.
Silver futures plunged nearly 2% in early Asian trading Monday after U.S. President Barack Obama delayed an imminent strike against Syria.
Prices rallied last week amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.
On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD24.15 a troy ounce during European morning trade, up 2.75%.
Silver prices fell by 1.8% earlier in the day to hit a session low of USD23.11 a troy ounce, the weakest level since August 23. The December contract settled 2.6% lower at USD23.51 a troy ounce on Friday.
Silver prices were likely to find support at USD22.88 a troy ounce, the low from August 23 and at USD24.46, the high from August 29.
Trading volumes were expected to remain light on Monday, with U.S. markets closed for the Labor Day holiday. Regular trading on Comex will resume on Tuesday following Monday’s Labor Day holiday.
Silver prices tumbled earlier amid fading expectations for imminent U.S. military action against Syria.
President Obama said Saturday that he will seek approval from Congress before ordering a military strike against Syria. A decision is not expected before September 9, when U.S. lawmakers return from their recess.
Silver prices surged to a four-month high of USD25.16 a barrel on August 28 as safe-haven buying picked up amid growing speculation the U.S. was moving closer to taking military action against Syria’s government.
U.S. Secretary of State John Kerry said Friday that the U.S. would punish Syrian President Bashar al-Assad for a "brutal and flagrant" chemical weapons attack that killed nearly 1,500 people in Damascus last week.
Futures erased losses to turn sharply higher after data showed that China’s final HSBC Purchasing Managers Index inched up to a four-month high of 50.1 in August, unchanged from a preliminary reading and up from 47.7 in July.
The upbeat data was published one day after a government report showed that China’s manufacturing purchasing managers' index climbed to a 16-month high of 51.0 in August from 50.3 in July, beating forecasts for 50.6.
A reading above 50.0 indicates industry expansion, below indicates contraction.
China is the world’s second largest silver consumer and manufacturing is a key driver of silver demand as it is used in solar panels and electronics as well as jewelry.
Elsewhere on the Comex, gold for December delivery shed 0.25% to trade at USD1,392.60 a troy ounce, while copper for December rallied 1.8% to trade at USD3.290 a pound
