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Silver futures rebound after Friday’s sell-off

Published 07/08/2013, 04:31 AM
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Investing.com - Silver futures regained strength on Monday, as investors returned to the market to seek cheap valuations after prices plunged nearly 5% in the previous session.

Gains were limited amid concerns the Federal Reserve will start to taper off its bond-buying program by the end of this year.

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 USD18.92 a troy ounce during European morning trade, up 1% on the day.

Comex silver prices held in a range between USD18.67, the daily low and a session high of USD19.08 a troy ounce.

Silver prices were likely to find support at USD18.18 a troy ounce, the low from June 28 and a 34-month low and resistance at USD19.58, the high from July 5.

Silver futures plunged 4.5% on Friday after the Department of Labor said the U.S. economy added 195,000 jobs in June, more than the 165,000 increase forecast by economists.

May's figure was revised up to 195,000 from a previously reported 175,000. The unemployment rate remained unchanged at 7.6% in June.

Fed Chairman Ben Bernanke said last month the bank could begin tapering its USD85 billion-a-month asset purchase program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.

Investors are now looking ahead to Wednesday's minutes of the Federal Reserve's June meeting, for further hints regarding the direction of U.S. monetary policy.

Silver prices are on track to post a loss of almost 36% on the year, amid speculation the Fed will start to unwind its bond purchasing program in the coming months.

Elsewhere on the Comex, gold for August delivery added 1.1% to trade at USD1,225.95 a troy ounce, while copper for September delivery eased up 0.3% to trade at USD3.075 a pound.

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