Silver futures climb 1% as Summers withdraws from Fed chair race

                   Silver futures kicked off the week with strong gains on Monday, after former U.S. Treasury secretary Larry Summers removed himself from consideration to be the next head of the Federal Reserve.

On the Comex division of the New York Mercantile Exchange, silver futures for December delivery traded at USD21.88 a troy ounce during European morning trade, up 0.75%. 

Silver prices rose by as much as 3.15% earlier in the day to hit a session high of USD22.43 a troy ounce. The December contract settled 1.94% lower at USD21.72 a troy ounce on Friday.

Silver prices were likely to find support at USD21.42 a troy ounce, Friday’s low and resistance at USD23.19, the high from September 12.

The U.S. dollar tumbled against its major counterparts after Summers pulled out of the race to be the next Fed chairman, easing investor concerns that he would aggressively scale back economic stimulus measures.

“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing recovery,” Summers wrote in a letter to President Barack Obama.

Summers’ withdrawal leaves Fed Vice Chairwoman Janet Yellen as the frontrunner for the job, who some analysts say may favor a slower reduction in U.S. stimulus.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.45% to hit 81.32, the lowest level since August 28.

Dollar-denominated silver futures contracts tend to rise when the dollar falls, as this makes commodities cheaper for buyers in other currencies.

Meanwhile, investors shifted their focus to the Fed’s upcoming two-day policy meeting, which concludes on Wednesday, amid ongoing speculation over the timing of the central bank’s widely expected reduction in monthly 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 quantitative easing program sooner-than-expected.

Elsewhere on the Comex, gold for December delivery rose 0.7% to trade at USD1,317.70 a troy ounce, while copper for December added 0.4% to trade at USD3.217 a pound.  - investing.com