Silver Prices Rebound Ahead of FOMC

London (Mar 13)  Silver prices rebounded Monday following back-to-back weeks of decline, as investors turned their attention to a high stakes meeting of the Federal Reserve that kicks off Tuesday.

May silver futures rose 14 cents, or 0.8%, to $17.07 a troy ounce at 7:43 a.m. ET. The contract rose by as much as 1.4% earlier in the day.

Gold prices also posted modest advances Monday morning. The April futures contract climbed $3.90, or 0.3%, to $1,205.40 a troy ounce. Bullion was up by as much as 0.8% overnight.

Precious metals are coming off a large two-week slump triggered by growing bets the U.S. Federal Reserve will raise interest rates this month. The Federal Open Market Committee (FOMC) will kick off its two-day policy meeting on Tuesday, with the official policy statement due the following afternoon at 2:00 p.m. ET. Traders have priced in a near 90% probability of liftoff on Wednesday, based on CME 30-day Fed Fund futures prices.

The official rate statement will be accompanied by quarterly projections for GDP, inflation and unemployment.

 Rate-hike bets grew on Friday after the Labor Department said employers added 235,000 workers to payrolls last month, far exceeding analysts’ forecast. The unemployment rate ticked down to 4.7% from 4.8% and average wages rose at a brisk 2.8% annual rate.

The U.S. dollar was little changed against a basket of other major currencies on Monday. The dollar index was last seen trading at 101.28, paring earlier declines.

There were no major economic data releases scheduled at the start of the week. Action resumes on Tuesday with events from around the world, including Chinese retail sales, Eurozone industrial production and U.S. factory-gate prices.

Source: EconomicCalendar