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Silver futures fall to 15-week low as dollar gains on Iran deal

Published 11/25/2013, 04:26 AM
Updated 11/25/2013, 04:26 AM
Investing.com - Silver prices fell to the lowest level since August on Monday, as the U.S. dollar strengthened following the announcement of a historic deal over Iran's nuclear program.

Ongoing concerns that the Federal Reserve could begin to slow its bond-purchasing program as soon as December also weighed.

On the Comex division of the New York Mercantile Exchange, silver futures for March delivery traded at USD19.71 a troy ounce during European morning trade, down 0.95%.

Comex silver prices fell to a session low of USD19.61 a troy ounce earlier, the weakest level since August 8.

The March contract settled down 0.38% on Friday to end at USD19.90 a troy ounce.

Futures were likely to find support at USD19.49 a troy ounce, the low from August 8 and resistance at USD20.07, the high from November 22.

Silver prices struggled due to a broadly stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.25% to trade at 80.89.

Talks held over the weekend in Geneva among the U.S. and five other global powers and Iran ended in agreement on a "first step deal” that is meant to limit advancements in Iran's nuclear program in exchange for easing economic sanctions against Tehran.

Bearish sentiment on the precious metal remained intact after minutes of the Federal Reserve’s October meeting published last week revealed that the central bank could start scaling back its USD85 billion-a-month asset purchase program in the “coming months” if the economy continues to improve as expected.

Investors are now looking ahead to key U.S. housing data due later in the session to further gauge the strength of the economy and the need for stimulus.

Silver prices are down approximately 35% this year on concerns the Fed would begin cutting back its easy-money policy by trimming its USD85-billion monthly bond purchasing program.

Elsewhere on the Comex, gold for February delivery tumbled 1.1% to trade at USD1,231.05 a troy ounce, the lowest since July 8, while copper for March delivery inched down 0.1% to trade at USD3.216 a pound.

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