Silver prices rose to a seven-day high on Tuesday, as a broadly weaker U.S. dollar boosted the appeal of the precious metal.
Dollar weakness usually benefits precious metals, like silver and gold, as it boosts the metal''s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
On the Comex division of the New York Mercantile Exchange, silver futures for March delivery traded at USD19.91 a troy ounce during European morning trade, up 1.1%. Comex silver prices rallied to a session high of USD20.03 a troy ounce earlier, the strongest level since November 29.
The March contract settled 0.91% higher on Monday to end at USD19.70 a troy ounce.
Futures were likely to find support at USD19.43 a troy ounce, the low from December 9 and near-term resistance at USD20.09, the high from November 29.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.1% to trade at 80.09, the lowest since October 31.
Investors shrugged off concerns the Federal Reserve might start tapering its bond-buying program at its upcoming policy meeting.
St. Louis Fed Bank President James Bullard said Monday tapering will become increasingly likely as long as the labor market continues to improve, while Dallas President Richard Fisher said that rising long-term U.S. Treasury yields suggest that investors are expecting a reduction in stimulus.
The central bank is scheduled to meet December 17-18 to review the economy and assess monetary policy.
Silver is down approximately 34% this year as solid U.S. economic data underlined expectations the Fed will begin curbing stimulus.
Elsewhere on the Comex, gold for February delivery rose 0.75% to trade at USD1,243.20 a troy ounce, while copper for March delivery was little changed to trade at USD3.259 a pound.
Data released earlier showed that Chinese industrial output rose less-than-forecast in November, while retail sales topped expectations.
Industrial production in China rose 10% last month, below expectations for a 10.1% increase, while retail sales jumped 13.7%, beating estimates for a 13.3% gain.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
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