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Silver remains under pressure near 33-month low on Fed outlook

CommoditiesJun 24, 2013 04:54AM ET
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Investing.com - Silver futures fell sharply on Monday, holding near the lowest level since September 2010, as the U.S. dollar remained stronger against the other major currencies after Federal Reserve Chairman Ben Bernanke said last week that the bank could start to taper bond buying.

On the Comex division of the New York Mercantile Exchange, silver futures for September delivery traded at USD19.64 a troy ounce during European morning trade, down 1.8% on the day.

Comex silver prices fell by as much as 7.5% earlier in the day to hit a session low of USD19.51 a troy ounce.

Comex silver prices plunged to USD19.31 a troy ounce on Friday, the weakest level since September 2, 2010.

Silver prices were likely to find near-term support at USD19.26 a troy ounce, the low from September 1, 2010 and resistance at USD20.51, the high from September 14, 2010.

Comex silver lost 9% last week after Fed Chairman Ben Bernanke said that the bank could begin tapering asset purchases by the end of 2013 if the economy continues to pick up.

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.

Indications the Fed will begin to taper asset purchases sent the U.S. dollar higher across the board.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.2% to trade at 82.80, the strongest level since June 4.

A stronger U.S. dollar usually weighs on silver, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Elsewhere on the Comex, gold for August delivery fell 0.6% to trade at USD1,283.85 a troy ounce, while copper for September delivery plunged 3.1% to trade at USD3.003 a pound.

Copper prices came under heavy selling pressure amid concerns about a cash crunch in the Chinese financial system and slowing global economic growth.

Wall Street lender Goldman Sachs slashed its estimate for Chinese gross domestic product in 2013 to 7.4% from 7.8%, citing weaker economic indicators and tightening of financial conditions

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Silver remains under pressure near 33-month low on Fed outlook

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