Spot silver continued to lose ground after a precipitate drop yesterday, as markets awaited news from the US Federal Reserve.
Prices of the white metal continue to hold near their highest levels since early April, despite a sharp fall yesterday afternoon that came after days of quiet trading. Dollar weakness in advance of the Fed meeting this week has been the key driver of silver moves recently, since some sort of action from Mr Bernanke is still widely forecast. Gold would be the chief beneficiary of any further bout of quantitative easing, but silver would also make gains if the Fed is seen to be more accommodative.
August was a particularly enjoyable month for silver bulls, but expectation can only drive an asset higher for so long. Mr Bernanke needs to deliver now if the metal is to make further gains, with $34 per ounce providing an immediate line of resistance.