Silver settled down -0.62% at 42080 headed for its sharpest weekly drop, hurt by strong U.S. economic data and fears that the Fed could hike interest rates sooner than expected. Bullion was hit hard after minutes from the Fed's July meeting on Wednesday showed policymakers debated whether interest rates should be raised earlier given a surprisingly strong job market recovery. Data showed U.S. home resales raced to a 10-month high in July and the number of Americans filing new claims for jobless benefits fell last week signalled strength in the economy, dulling bullion's appeal as a safe-haven. Investors fear strong data would prompt the Fed to soon raise interest rates. Markets are eyeing Fed Chair Janet Yellen's speech at the annual gathering of central bankers in Jackson Hole, Wyoming later in the day. Also Geopolitical tensions in Ukraine and the Middle East were being watched for any escalation in violence that could prompt safe-haven bids for gold. From the Physical market the demand for Silver in India has fallen rapidly since the start of the current fiscal year, said IBJA in its latest report. The association cites scarce monsoon and buoyant stock markets as the key factors that led to the sudden drop in demand for Silver in the country. The country’s silver imports had totaled nearly 4,000 tons during the fiscal 2013-’14, averaging nearly 330 tons per month. However, the average silver imports during the initial four months of the current fiscal dropped drastically to around 70-80 tons per month, almost 75% lower when compared with average imports during previous fiscal. Technically market is under long liquidation and getting support at 41880 and below same could see a test of 41679 level, And resistance is now likely to be seen at 42285, a move above could see prices testing 42489.

Trading Ideas:

Silver trading range for the day is 41679-42489.

Silver dropped after upbeat U.S. data fueled growing expectations that the days of ultra-loose monetary policies are coming to an end.

Fed released the minutes of its July policy meeting revealed that interest rates could come sooner rather than later if the labor market continues to recover.

Data showed that U.S. existing home sales increased 2.4% to 5.15 million units last month from 5.03 million in June.