Silver futures seesaw in rangebound trade ahead of Fed meeting

Silver futures swung between small gains and losses in rangebound trade on Tuesday, as investors stuck to the sidelines ahead of the outcome of the Federal Reserve’s keenly anticipated policy meeting on Wednesday.

On the Comex division of the New York Mercantile Exchange, silver futures for July delivery traded at USD21.73 a troy ounce during European morning trade, down 0.1% on the day.

Comex silver prices held in a range between USD21.68 a troy ounce, the daily low and a session high of USD21.87 a troy ounce.

Silver prices were likely to find near-term support at USD21.34 a troy ounce, the low from June 10 and resistance at USD22.24, June 14’s high.

Investors remained cautious amid speculation over whether the Fed will begin to scale back its easing program after Chairman Ben Bernanke said last month the bank could begin to taper asset purchases if the economy continued to improve.

Attention will focus on Bernanke’s press conference on Wednesday, which investors are hoping will provide further clues on how long the central bank will maintain its USD85-billion-a-month in bond purchases.

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.

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.

Indications of robust physical demand supported the precious metal after the U.S. Mint said Monday that sales of silver coins hit a record high in the first half of 2013.

The Mint has already sold 23.3 million ounces of silver coins so far in 2013. The Mint's previous first-half sales record of 22.3 million ounces was set in the first six months of 2011.

Elsewhere on the Comex, gold for August delivery was down 0.35% to trade at USD1,378.45 a troy ounce, while copper for July delivery fell 0.65% to trade at USD3.177 a pound.