Fed QE taper pulls down silver futures

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Silver futures ended lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal tracking a weak trend in the overseas market after the US Federal Reserve pared its monthly bond buying program by USD 10 billion, dimming the appeal of the shiny metal, which is a hedge against the inflationary risk of monetary stimulus.

A stronger dollar also dimmed the appeal of the precious metal as an alternative asset. A stronger greenback makes silver more expensive for those holding other currencies, thus dimming demand.

Silver futures for May 2014 contract, at MCX, closed at Rs. 45,673 per 10 grams, down by 0.36 per cent after opening at Rs. 45,990, against the previous closing price of Rs 45,840. It touched an intra-day low of Rs 45,227.

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Story first published: Thursday, March 20, 2014, 12:53 [IST]
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