New York Silver Slips In Early Trade

Silver looks like it's going to trade back down to $5.13, which was the chart resistance level it broke out from yesterday, one trader said.

Comex September silver was down 3.5 cents at $5.175 an ounce from a $5.210 overnight high.

September silver jumped to two month highs at $5.24 Monday. Comex silver stocks fell 840,837 ounces to 151,107,103 ounces Monday.

The approaching first delivery date for the September Comex contract, which still has some 270 million ounces of open interest, may have provided some incentive to go long, one analyst said. Comex December gold was down $0.10 an ounce at $392.3 midmorning, after trading in a narrow $392.20-392.80 range.

 

On the charts, gold's uptrend since late June still looks intact, traders said, but the rally's momentum has waned and further gains may just prompt more producer hedging.

Gold failed to follow silver up Monday, with the gold/silver ratio declining to 74.5 from 76 Friday.

Bullion was quoted $387.00/387.50 in New York midmorning, from $387.10 at the London morning fix Tuesday, and a New York close Monday at $386.90/387.40.

The US Federal Reserve's Open Market Committee (FOMC) meeting continues Tuesday, though no rise in interest rates are expected when the meeting concludes later in the day.

Nymex October platinum was up $0.20 an ounce at $403.30, while Nymex September palladium was up $0.50 an ounce at $125.50.

Support in palladium seems to be forming at $124 and is not likely to be penetrated near term, one analyst said.

The large open interest in the September Nymex price could lead prices to push back to $130-136 in the next two weeks.