Silver price trades higher as longest losing streak since January looms

Silver has been trading higher today after choppy price action earlier in the week. Should it finish lower tomorrow on a weekly basis, it would mark the longest losing streak since the three weeks ended January 31.

Silver futures finished yesterday’s session with a marginal loss of a little over one cent a troy ounce on strong US Q2 GDP data, and a firm dollar.

The Federal Open Market Committee (FOMC) released a statement yesterday at 19:00 BST after a two-day policy meeting. The FOMC cut its monthly asset purchases by a further $10 billion – bringing the total down to $25 billion a month, in line with expectations.

However, the committee outlined areas in which it thought the economy had further room to improve, focusing on the labour market, despite an unexpected drop in unemployment.

The FOMC commented

“Labor market conditions improved, with the unemployment rate declining further. However, a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow.”

US second quarter GDP grew at a four percent annualized rate after contracting 2.1 percent in the first quarter. The median estimate of 80 economists polled by Bloomberg had called for a three percent advance. Consumer spending, the largest component of the economy climbed by 2.5 percent, reflecting the biggest gain in purchases of durable goods in almost five years.

On the New York Mercantile Exchange (NYMEX), September silver futures were 16 cents, or 0.5 percent, up at $20.82 as of 08:47 BST. They have declined 0.8 percent so far this month, after gaining more than 11 percent in June.