Silver falls to 4-week low after Fed tapers stimulus

             Silver futures fell to a four-week low on Thursday, after the Federal Reserve announced that it will taper its bond-buying program by USD10 billion a month.

On the Comex division of the New York Mercantile Exchange, silver futures for March delivery fell to a session low of USD19.28 a troy ounce, the weakest since December 31, before trimming losses to trade at USD19.39 during European morning hours, down 0.8%.

The March contract settled 0.25% higher on Wednesday to end at USD19.55 an ounce. Silver futures were likely to find support at USD19.13 a troy ounce, the low from December 20 and resistance at USD19.96, the high from January 29.

Meanwhile, gold for April delivery traded at USD1,257.00 a troy ounce, down 0.4%.

The Fed said Wednesday that it would reduce its monthly bond buying program by USD10 billion to a total of USD65 billion a month, in a widely anticipated decision.

The U.S. central bank said growth signals are encouraging, and the unemployment market shows improvement "on balance".

The Fed left unchanged its statement that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the central bank has previously said it would start to consider rate increases.

The Fed added it will keep a close eye on economic indicators before deciding to wind down its stimulus program even further.

The U.S. is to publish preliminary data on fourth quarter economic growth. The nation is also to release the weekly report on initial jobless claims and data on pending home sales.

Elsewhere on the Comex, copper futures for March delivery inched up 0.1% to trade at USD3.244 a pound. Copper prices slumped to a seven-week low of USD3.231 a pound earlier after data confirmed a contraction in China’s manufacturing sector.

China’s final HSBC Purchasing Managers Index released earlier fell to a six-month low of 49.5 in January from a preliminary reading of 49.6 and down from 50.5 in December.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year - Investing.com

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