Silver yesterday settled down -0.9% at 41854 as investors cashed out of the market to lock in gains following Monday's big rally. Sentiment remained supported amid easing concerns over the possibility the Federal Reserve will begin to taper its bond-buying program in the near future. Silver surged more than 3% on Monday to hit USD20.57 a troy ounce, the strongest level since June 20, as the U. S. dollar weakened broadly after data showed that U. S. existing home sales fell unexpectedly in June. Fed Chairman Ben Bernanke said last week that the pace of its bond purchases would depend on U. S. economic health. Sentiment on the precious metal has been upbeat ever since comments by Fed Chairman Ben Bernanke last week eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future. Bernanke said that the pace of the central bank's bond purchases are not a "preset course". The Fed chief reiterated that the central bank will continue to maintain its accommodative monetary policy for the foreseeable future. Federal Reserve officials have said they will pay close attention to economic data when deciding when to taper and eventually close stimulus programs, though they have added they won't follow specific timetables. Technically market is under long liquidation as market has witnessed drop in open interest by -4.5% to settled at 11111 while prices down -380 rupee, now Silver is getting support at 41636 and below same could see a test of 41418 level, And resistance is now likely to be seen at 42147, a move above could see prices testing 42440.

Trading Ideas:

Silver trading range for the day is 41418-42440.

Silver dropped as investors cashed out of the market to lock in gains following Monday's big rally.

Sentiment remained supported amid easing concerns over possibility Fed will begin to taper its bond-buying program in the near future.

Fed Chairman Ben Bernanke said last week that the pace of its bond purchases would depend on U. S. economic health.