Silver holds above 4-month low

Silver prices rose in the Europe market on Wednesday, to rally above a four-month low recorded earlier in the day, and heads to its first gain in three days, but prices remain under pressure from the strong performance of the US dollar against a basket of currencies.

Silver prices rose 0.3% to $14.86 an ounce from the opening level of $14.81 and the lowest at $14.78.

Silver ended yesterday's trading dropping 1.1%, in the second consecutive daily loss, recording a 4-month low at $14.74 an ounce, with most of the metals denominated in US Dollars falling.

The dollar index rose 0.1% on Wednesday, extending its gains for a second day in a row, approaching the seven-week high of 97.45, reversing the dollar's gains against a basket of major and minor currencies.

The rise in the US currency as US dollar purchases continue to be the best current investment in the foreign exchange market, especially as most of the global central banks are moving to expand flexible monetary policies to cope with the economic slowdown.

In contrast to the strength of the US dollar, silver prices are double the levels of investment demand on safe assets, with investors focusing on buying in global stock and bond markets.