Silver Slides Nearly 1%, Prices Slide After Hitting Seven-Week Highs

London (Jan 15)   Silver slumped today, falling down in tune with the gold prices as traders booked profits ahead of some key economic data. The white metal had jumped in first few days of the New Year, breaking through the $20 barrier as the US dollar eased and a plethora of fresh buying lifted the bullion prices. However, worries about the Chinese economic growth and US Fed's perusal of the “taper” policy have capped the gains. The metal is quoting at $20.09 per ounce, down 0.95% on the day. MCX Silver futures for March are trading at Rs 44597, down Rs 344 or 0.77% on the day with 3.85% increase in the open interest. 

US stocks edged up yesterday as a strong retail sales data from US stoked rally in the equities and pulled precious metals down. The S&P 500 closed 19.68 points, or 1.1%, higher at 1,838.88, and the Dow Jones Industrial Average rose 115.92 points, or 0.7% to 16,373.86, as investors welcomed stronger-than-expected retail sales. Gold dropped from its one month high amid the gains in US stocks. 

The US Commerce Department said core retail spending posted a big jump, a sign the economy was gathering steam at the end of last year and was poised for stronger growth in 2014. Retail and food services sales climbed to $431.9 billion, an increase of 0.2 percent from the previous month and a 4.1 percent gain over December 2012. Sales rose 4.6 percent year over year.

The US dollar is holding steady after recovering from a two week low against the Euro. COMEX Silver had edged up to a seven week high of $20.67 per ounce yesterday before easing and could drop further as investors eye a barrage of economic data. The US December producer price index and the January Empire State index are due today. The Beige Book will also be published to make it a hectic session on the economic front. Further, Chicago Fed President Charles Evans and Atlanta Fed President Dennis Lockhart are due to speak out as well.