Sentiment remained supported amid easing concerns over the possibility the Federal Reserve will begin to taper its bond-buying program in the near future.
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 USD20.29 a troy ounce during European morning trade, down 1% on the day.
Comex silver prices fell by as much as 1.4% earlier in the session to hit a daily low of USD20.21 a troy ounce.
Silver prices were likely to find support at USD19.29 a troy ounce, the low from July 19 and resistance at USD21.23, the high from June 20.
Silver surged more than 3% on Monday to hit USD20.57 a troy ounce, the strongest level since June 20, as the U.S. dollar weakened broadly after data showed that U.S. existing home sales fell unexpectedly in June.
Fed Chairman Ben Bernanke said last week that the pace of its bond purchases would depend on U.S. economic health.
Sentiment on the precious metal has been upbeat ever since comments by Fed Chairman Ben Bernanke last week eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future.
Bernanke said that the pace of the central bank’s bond purchases are not a “preset course”.
The Fed chief reiterated that the central bank will continue to maintain its accommodative monetary policy for the foreseeable future.
Silver prices are on track to post a loss of almost 34% 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 shed 0.4% to trade at USD1,330.65 a troy ounce, while copper for September delivery declined 0.6% to trade at USD3.167 a pound.
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