Silver settled up 1.51% at 41875 as growing turmoil in Iraq helped lift prices to their highest settlement in three weeks. The geopolitical events currently unfolding in Iraq was just the boost that bullion needed. In U.S. economic news, producer prices unexpectedly sank in May, while consumer sentiment data showed a decline in June to the lowest level in three months. The safe-haven metal, however, failed to rally further on market expectations that security conditions in Iraq will improve soon. Markets breathed a sigh of relief, however, after U.S. President Barack Obama said he won't sent troops to Iraq and added oil continues to flow normally out of the country, which capped gold's advance by boosting hopes U.S. support will help the Iraqi government halt the rebellion. In a preliminary report, the University of Michigan consumer sentiment index fell to 81.2 this month from 81.9 in May, whose figure was revised up from a previously estimated reading of 81.8. Market had expected the index to rise to 83.0 in June. Also on Friday, official data showed that U.S. producer price inflation fell 0.2% in May, confounding expectations for a 0.1% rise, after a 0.6% increase the previous month. Core producer price inflation, which excludes food, energy and trade, slipped 0.1% last month, compared to expectations for an increase of 0.1%, after a 0.5% rise in April. Technically market is under short covering as market has witnessed drop in open interest by -2.2% to settled at 10056 while prices up 624 rupee, now Silver is getting support at 41486 and below same could see a test of 41098 level, And resistance is now likely to be seen at 42081, a move above could see prices testing 42288.

Trading Ideas:

Silver trading range for the day is 41098-42288.

Silver settled up as growing turmoil in Iraq helped lift prices to their highest settlement in three weeks.

The safe-haven metal, however, failed to rally further on market expectations that security conditions in Iraq will improve soon

Official data showed that U.S. producer price inflation fell 0.2% in May, confounding expectations for a 0.1% rise.