Investors have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.
Moves in the silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.
On the Comex division of the New York Mercantile Exchange, silver futures for September delivery traded at USD20.90 a troy ounce during European morning trade, up 2.4%.
Silver futures hit a session high of USD21.24 a troy ounce earlier in the day, the strongest level since June 19.
Silver prices were likely to find support at USD20.06 a troy ounce, Friday’s low and resistance at USD21.75, the high of June 19.
The September contract settled up 1.1% at USD20.40 a troy ounce on Friday.
Market players were looking ahead to Tuesday’s retail sales report, as well as speeches by senior Federal Reserve officials later in the week amid ongoing speculation over how soon the Fed may start to pull back its asset purchase program.
Silver prices are on track to post a loss of almost 37% on the year, amid concerns the U.S. central bank will start to taper its bond purchasing program in the coming months.
Elsewhere on the Comex, gold for December delivery rose 1.1% to trade at USD1,326.20 a troy ounce, while copper for September delivery eased up 0.1% to trade at USD3.308 a pound, the highest since June 7.
Appetite for the red metal improved after data on Friday eased concerns over a slowdown in China’s economy.
Official data showed that Chinese industrial output rose significantly more-than-forecast in July and consumer price inflation remained unchanged, alleviating fears over a slowdown in the world’s second-largest economy.
Market sentiment received a further boost after Hong Kong daily newspaper South China Morning Post reported earlier that Beijing was “quietly offering financial stimulus” to key cities and provinces to support economic growth.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.