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Silver futures higher despite U.S. default fears

Published 10/14/2013, 04:35 AM
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Investing.com - Silver futures edged higher on Monday, despite concerns negotiations aimed at raising the U.S. debt ceiling before Thursday’s deadline will fail, resulting in an unprecedented default.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD21.37 a troy ounce during European morning trade, up 0.55%.

Silver prices held in a range between USD21.11 a troy ounce, the daily low and a session high of USD21.47 a troy ounce.

The December contract ended 2.91% lower on Friday to settle at USD21.25 a troy ounce.

Silver prices were likely to find support at USD20.97 a troy ounce, the low from October 11 and resistance at USD21.85, October 11’s high.

Over the weekend, President Barack Obama rejected Republican proposals for a short-term debt ceiling increase, fuelling concerns that a deal to raise the government borrowing limit would not be struck ahead of Thursday’s deadline to avert an unprecedented U.S. sovereign debt default.

Elsewhere on the Comex, gold for December delivery added 0.6% to trade at USD1,276.00 a troy ounce, while copper for December advanced 0.75% to trade at USD3.294 a pound.

Data released earlier in the day showed that consumer price inflation in China rose 3.1% in September, above expectations for a 2.9% increase and accelerating from 2.6% in August.

The inflation report came after data over the weekend showed that China’s trade surplus narrowed sharply in September as exports declined unexpectedly, fuelling concerns over the global economy.

China’s trade surplus narrowed to USD15.2 billion last month from a surplus of USD28.6 billion in August, compared to estimates for a surplus of USD27.7 billion.  

Chinese exports fell 0.3% from a year earlier, defying expectations for a 6% increase and following a 7.2% gain in August.

Market players now looked ahead to a raft of Chinese economic data later in the week, including reports on gross domestic product, industrial production and retail sales.

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

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