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Silver futures edge higher with Fed, ECB in focus

Published 04/30/2013, 04:39 AM
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Investing.com - Silver futures edged higher on Tuesday, amid growing expectations the Federal Reserve and the European Central Bank will continue with their monetary stimulus policies.  

On the Comex division of the New York Mercantile Exchange, silver futures for July delivery traded at USD24.36 a troy ounce during European morning trade, up 0.8% on the day.

Comex silver prices rose by as much as 1.6% earlier in the session to hit a daily high of USD24.56 a troy ounce.

Silver prices were likely to find support at USD23.02 a troy ounce, the low from April 25 and near-term resistance at USD24.78, the high from April 26.

Silver futures rallied 2% on Monday amid sentiments the Federal Reserve will decide to keep its loose monetary policy in place for the indefinite future following the conclusion of its policy meeting on Wednesday.

Official data released last week showed that the U.S. economy grew at a weaker rate than expected in the first quarter, underlining concerns over the outlook for the economic recovery.

The data dampened expectations for an earlier than expected end to the central bank’s asset purchase program after recent Fed minutes showed that policymakers are divided over the benefits of ongoing monetary easing.

Investors are also looking ahead to the outcome of the European Central Bank’s policy meeting on Thursday, amid growing expectations for a rate cut, as well as Friday’s closely watched report on U.S. nonfarm payrolls.

Silver, like gold, can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.

Comex silver fell to a 30-month low of USD22.04 a troy ounce on April 16. Since then, the precious metal has climbed nearly 10% as investors returned to the market to seek cheap valuations.

Prices of the silver metal are still down almost 12% in April.

Elsewhere on the Comex, gold for June delivery rose 0.4% to trade at USD1,473.55 a troy ounce, while copper for July delivery dipped 0.1% to trade at USD3.224 a pound.

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