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Silver tops USD22 for the first time since June as rally continues

Published 08/15/2013, 04:38 AM
Updated 08/15/2013, 04:38 AM
Investing.com - Silver futures rose for the seventh consecutive session on Thursday to hit the highest level since mid-June, as traders looked ahead to the release of a series of U.S. economic data later in the trading day.

Investors have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to reduce its USD85-billion-a-month stimulus program.

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 USD22.04 a troy ounce during European morning trade, up 1.2%.

Silver futures hit a session high of USD22.15 a troy ounce earlier in the day, the strongest level since June 14.

Silver prices were likely to find support at USD20.62 a troy ounce, the low from August 12 and near-term resistance at USD22.24, the high from June 14.

The September contract settled up 2.1% at USD21.78 a troy ounce on Wednesday after official data showed that U.S. producer price inflation was flat in July, while core inflation rose less-than-forecast.

The disappointing data raised fresh doubts over whether the economic recovery is strong enough for the Fed to begin tapering its USD85 billion-a-month asset purchase program later this year.

Market players now looked ahead to U.S. data on consumer inflation, jobless claims and industrial production, as well as reports on manufacturing activity in New York and Philadelphia.

Silver prices are on track to post a loss of almost 27% on the year, amid concerns the U.S. central bank will start to scale back its bond purchasing program in the coming months.

Elsewhere on the Comex, gold for December delivery rose 0.4% to trade at USD1,338.50 a troy ounce, while copper for September shed 0.5% to trade at USD3.323 a pound.

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