Silver prices kick off 2014 with strong gains
Investing.com - Silver prices kicked off 2014 with strong gains on Thursday, as investors returned to the market to seek cheap valuations in wake of recent losses.
On the Comex division of the New York Mercantile Exchange, silver futures for March delivery traded at USD19.99 a troy ounce during European morning trade, up 3.2%. Comex silver prices surged by as much as 5.2% earlier in the session to hit USD20.43 a troy ounce, the highest since December 11.
Futures were likely to find support at USD18.72 a troy ounce, the low from December 31 and resistance at USD20.47, the high from December 11. There was no floor or electronic trading on Wednesday because of the New Year’s Day holiday.
Trading volumes are expected to remain light due to the holiday period, reducing liquidity in the market and increasing volatility, which can help exaggerate market moves.
Silver prices ended 2013 with a loss of nearly 37%, its worst annual decline since 1981, as solid U.S. economic data underlined expectations the Federal Reserve will begin curbing stimulus.
Meanwhile, gold futures for February delivery jumped 1.6% to trade at USD1,221.70 a troy ounce. Comex gold prices lost nearly 29% in 2013, its first yearly loss since 2000 and the worst in 32 years.
Market players looked ahead to U.S. data on manufacturing activity and weekly jobless claims later in the day, to gauge if the U.S. economy will be strong enough to allow the Fed to continue withdrawing support through 2014. The U.S. central bank will reduce its bond-buying stimulus program by USD10 billion a month starting in January.
Some market participants believe the Fed will likely taper its bond purchases by USD10 billion in each of its next seven meetings before ending the program in December 2014, amid indications of an improving U.S. economy.
Elsewhere on the Comex, copper for March delivery inched up 0.55% to trade at USD3.415 a pound, the highest since April.
Copper prices have been well-supported in recent weeks amid indications the U.S. economic recovery is deepening. The U.S. is second behind China in global copper demand.