Silver settled down -0.54% at 41533 after encouraging US economic data showing the trade gap narrowed and more indications the Fed could withdraw its monetary stimulus as early as next month. Bullion's failure to hold above $1,300 an ounce earlier in the day triggered technical selling. Bullion was under pressure after Monday's international trade data showed the US economy likely grew faster than initially reported in the second quarter, thanks to a sharp narrowing in the trade deficit to its lowest in more than 3-1/2 years in June as exports touched a record high and imports fell. Also weighing on gold was uncertainty over the time frame of the Fed's planned reduction of its bond purchases to stimulate the economy known as quantitative easing. Silver prices were likely to find support at $19.18 a troy ounce, the low from August 2 and resistance at $20.18, the high from July 29. The ISM said its non-manufacturing PMI rose to 56.0 from a three year low of 52.2 in June, as new orders jumped. Investors have closely been looking out for US data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases. Silver prices are on track to post a loss of almost 34% on the year, amid speculation the Fed will start to unwind its bond purchasing program in the coming months. Technically market is under long liquidation as market has witnessed drop in open interest by -0.36% to settled at 9579 while prices down -227 rupee, now Silver is getting support at 41279 and below same could see a test of 41025 level, And resistance is now likely to be seen at 41968, a move above could see prices testing 42403.

Trading Ideas:

Silver trading range for the day is 41025-42403.

Silver dropped after strong U. S. trade data saw investors reassess expectations on when the Federal Reserve may start to taper its asset purchase program.

The Commerce Department said that the U. S. trade deficit narrowed by 22.4% to a seasonally adjusted USD34.2 billion in June.

Federal Reserve Bank of Dallas President Richard Fisher said that monetary stimulus programs won't last forever.