Investing.com - Silver prices rallied to a five-week high on Thursday, as the dollar dropped after the Federal Reserve indicated that interest rates will remain low for a considerable time after the bank’s bond-buying program ends.
On the Comex division of the New York Mercantile Exchange, silver for July delivery rose to a session high of $19.94 a troy ounce, the most since May 14, before trimming gains to last trade at $19.93 during European morning hours, up 0.78%, or 15.4 cents.
Also on the Comex, gold for August tacked on 0.7%, or $8.90, to trade at $1,281.60. Prices were likely to find support at $1,258.00, the low from June 17 and resistance at $1,285.10, the high from June 16.
At the conclusion of its two-day meeting on Wednesday, the Fed cut its bond purchases by another $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.
The Fed said it expects the federal-funds rate, currently close to zero, to reach 1.2% by the end of next year and 2.5% by the end of 2016, a slightly faster rate of tightening than formerly expected.
But the forecast did not bring forward the timing for the first rate hike, disappointing many investors and weighing on the dollar.
The U.S. dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.22% to 80.32, the lowest since June 6.
Dollar weakness usually benefits silver and gold, as it boosts the precious metals' appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
The U.S. is to publish the weekly report on initial jobless claims as well as a report on manufacturing activity in the Philadelphia region later in the day.
Elsewhere in metals trading, copper for July delivery dipped 0.1%, or 0.3 cents, to trade at $3.057 a pound.