Silver futures tumble 2% in year-end trade
New York (Dec 30) Silver prices were under heavy pressure on Monday, as concerns over the impact of the Federal Reserve's decision to begin tapering its stimulus program next month continued to weigh.
On the Comex division of the New York Mercantile Exchange, silver futures for March delivery traded at USD19.66 a troy ounce during European morning trade, down 1.95%. Comex silver prices fell by as much as 2.5% earlier in the session to hit USD19.54 a troy ounce, the lowest since December 26.
Silver prices settled 0.67% higher on Friday to end at USD20.04 a troy ounce. Futures were likely to find support at USD19.47 a troy ounce, the low from December 26 and resistance at USD20.10, the high from December 27.
Trading volumes remained limited as many investors already closed books before the end of the year, reducing liquidity in the market.
Market players looked ahead to U.S. data on pending home sales later in the day, to gauge if the U.S. economy will be strong enough to allow the Fed to continue withdrawing support through 2014.
The U.S. central bank said earlier in the month that it will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.
Some market participants believe the Fed will likely reduce its bond purchases by USD10 billion in each of its next seven meetings before ending the program in December 2014.
Silver is down approximately 36% this year, as solid U.S. economic data underlined expectations the Fed will begin curbing stimulus.
Elsewhere on the Comex, gold futures for February delivery fell 0.75% to trade at USD1,204.60 a troy ounce, while copper for March delivery inched up 0.1% to trade at USD3.389 a pound.