Silver Dropped as the Dollar Firmed up Ahead of Key Central Bank Meetings

  • Commodities Analysis

Silver yesterday settled down by -1.74% at 64989 as the dollar firmed up ahead of key central bank meetings this week. The European Central Bank (ECB) is expected to take a dovish stance when it meets on Thursday. The U.S. Federal Reserve meets next week and it is likely that the U.S. central bank will announce plans to begin scaling back its asset purchase program. Fed Chair Jerome Powell's comments that although the central bank will start tapering its bond-buying program this year, but "it is not yet time to begin raising interest rates," pushed the dollar to near one-month low earlier in the day. Powell said at a virtual conference that the present high price pressure may not subside soon and that the central bank was on track to start tapering its stimulus.  
 
U.S. consumer confidence unexpectedly rose in October as concerns about high inflation were offset by improving labor market prospects, suggesting economic growth picked up early in the fourth quarter. The Conference Board said its consumer confidence index increased to a reading of 113.8 this month from 109.8. Sales of new U.S. single-family homes surged to a six-month high in September, but higher house prices are making homeownership less affordable for some first-time buyers.  
 
Technically market is under fresh selling as the market has witnessed a gain in open interest by 7.01% to settled at 10377 while prices down -1150 rupees, now Silver is getting support at 64323 and below same could see a test of 63656 levels, and resistance is now likely to be seen at 65946, a move above could see prices testing 66902.

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