Silver settled up 0.52% at 40506 managed to edge back above 40000 level as rally triggered by short-covering, and investor confidence in the Euro area fell which boosted safe haven demand for the precious metal. Also support seen as Indian rupee weakened for a second day on Tuesday as good demand for the greenback from importers and weakness in domestic shares through a large part of the day, as also in other Asian currencies, hurt sentiment. However a stronger dollar dimmed the appeal of the precious metal as an alternative asset trimming gains in Gold futures. Stronger dollar makes bullion more expensive for those holding other currencies thus dimming demand. Traders continued to digest the implications of last week's monetary easing move by the ECB and U.S. jobs data which was largely in line with expectations. The ECB cut the main refinancing rate in the euro area to a record low 0.15% last week and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses. ECB President also kept the option of QE on the table. Meanwhile, the Department of Labor said last week that the U.S. economy added 217k jobs in May, just under expectations for jobs growth of 218,000, while the unemployment rate remained unchanged at a 5.5year low of 6.3%. The precious metal has been under heavy selling pressure recently as investors bet on strong economic growth in the U.S. during the Q2, as the economy shakes off the effects of a weather-related slowdown over the winter. Now Silver is getting support at 40219 and below same could see a test of 39931 level, And resistance is now likely to be seen at 40689, a move above could see prices testing 40871.

Trading Ideas:

Silver trading range for the day is 39931-40871.

Silver gains as traders await economic data later in the week and take cues from global risk appetite.

ECB cut its benchmark interest rate last week to a record-low 0.15% from 0.25% and said it will support the banking sector

Stronger dollar makes bullion more expensive for those holding other currencies thus dimming demand.