Silver settled up 0.06% at 42398 as support seen after rupee fell as the worsening crisis in Iraq threatened to disrupt oil supplies but recovered from session lows after state-owned banks sold dollars, likely on behalf of the central bank. Meanwhile Comex Silver posted slight gains after the Federal Reserve cut its bond-buying program by $10 billion but reaffirmed its plans to keep interest rates at current rock-bottom levels for a while longer after it ends stimulus measures. The Federal Reserve on Wednesday said it was leaving its benchmark interest rate unchanged at 0.00-0.25% but said it would cut its monthly bond-buying program to $35 billion from $45 billion due to an improving economy. Fed bond purchases support gold by weakening the dollar, as the two assets tend to trade inversely with one another, and news of their dismantling often weakens the bullion. Still, bullion found room to rise on Wednesday as the Fed pointed out once bond purchases end, rates won't rise immediately afterwards, the Fed's rate setting body, the FOMC, said in a statement earlier. "The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2% longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed said. Technically market is under short covering as market has witnessed drop in open interest by -1.49% to settled at 8722 while prices up 24 rupee, now Silver is getting support at 42160 and below same could see a test of 41923 level, And resistance is now likely to be seen at 42602, a move above could see prices testing 42807.

Trading Ideas:

Silver trading range for the day is 41923-42807.

Silver prices swung between small gains and losses as investors remained on the sidelines ahead of the outcome of the Federal Reserve's policy meeting.

The U.S. current account deficit widened more than expected in the first three months of the year, official data showed.

The central bank slashed its forecast for U.S. economic growth to a range of between 2.1 percent and 2.3 percent