Silver bears step in as the US dollar firms-up
- Silver is under pressure as the greenback bounces back to life.
- FOMC minutes are the focus for markets for the sessions ahead.
Silver was pressured on Tuesday by a comeback in the US dollar as traders returned from the US holidays and long weekend.
XAG/USD was heading towards the closing bell on Wall Street down by some 1.2%, slightly up from the lows at $26.16 after travelling from a high of $26.77 to a low of $26.01.
The greenback was firmer as traders positioned themselves ahead of Wednesday's Federal Reserve minutes from the pivotal June meeting where taper discussions took place.
The market is awaiting more confirmation clues of the opinions of FOMC members on when tapering will begin.
A more hawkish spin within the minutes from the members would be expected to support the greenback higher, especially in the wake of disappointing data from Europe on Tuesday.
Investors were disappointed on weaker than expected data from the euro area which has tarnished the allure for the shared currency (which is by far, the largest component of the DXY index, making up almost 58 per cent (officially 57.6%) of the basket).
As a consequence, the index has been able to move in on the daily highs:
As for the metals, analysts at TD Securities explained that they believe there is still ''mettle in the precious metals, as inflation should prove transitory, which implies that market pricing for Fed policy is too hawkish.''
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
