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Silver futures decline after Tuesday’s rally

Published 10/23/2013, 04:31 AM
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Investing.com - Silver prices were lower for the first time in three days on Wednesday, as investors sold contracts to lock in gains from a sharp rally which took prices to a five-week high during the previous session.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD22.58 a troy ounce during European morning trade, down 0.9%.

Silver prices traded in a range between USD22.56 a troy ounce, the daily low and a session high of USD22.81 a troy ounce.

The December contract rallied to USD22.83 a troy ounce on Tuesday, the strongest level since September 20, before settling at USD22.79 a troy ounce, up 2.3%.

Silver prices were likely to find support at USD21.87 a troy ounce, the low from October 21 and resistance at USD23.07, the high from September 20.

Silver futures have been well-supported in recent sessions amid speculation the Federal Reserve will maintain its stimulus program well into 2014 to support the economy following the U.S. government shutdown.

On Tuesday, the Department of Labor said that the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.

The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August, but this was partially due to more people dropping out of the labor force.

The disappointing data bolstered expectations that the Fed would postpone plans to start scaling back its asset purchase program until at least the beginning of next year.

Silver prices have largely tracked shifting expectations as to whether the Fed would start tapering its USD85-billion-a-month asset-purchase program by the end of the year.

The central bank is scheduled to meet October 29-30 to review the economy and assess policy.

Elsewhere on the Comex, gold for December delivery shed 0.8% to trade at USD1,331.80 a troy ounce, while copper for December fell 0.75% to trade at USD3.310 a pound.

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