Silver in Bear grip as Fed eyed

Silver prices retreated during noon trade in the domestic market on Tuesday as traders stuck to a cautious stance eying the two-day US Fed meet which begins later today wherein the Fed may offer some cues over the exact timing for a maiden interest rate lift-off since 2006.

A hike in borrowing costs will be bearish for Silver which, like Gold doesn’t earn any interest, and hence loses out against competing assets when interest rates head northward.

Fed Chair Janet Yellen indicated recently that the FOMC is likely to raise rates at some point in 2015, curbing the lure for Silver as a store of value. Upbeat US durable goods orders report with capital equipment orders bouncing back into positive terrain in June signaled improving health of the world’s biggest economy, bolstering the case for the US Federal Reserve to start considering an exit from its easy money policy stance.

At the MCX, Silver futures for September 2015 contract is trading at Rs 33,770 per 1 kg, down by 0.47 per cent after opening at Rs 33,760, against the previous closing price of Rs 33,930. It touched the intra-day low of Rs 33,750. (At 12:47 PM).