Silver futures trim gains after dismal German IFO data

                          Silver futures trimmed gains during European morning hours on Wednesday, coming off the highest levels of the session after data showed that German business confidence in April weakened to a four-month low.

On the Comex division of the New York Mercantile Exchange, silver futures for May delivery traded at USD22.94 a troy ounce during European morning trade, up 0.6% on the day.

Comex silver prices rose by as much as 2.1% earlier in the session to hit a daily high of USD23.31 a troy ounce. 

Silver prices were likely to find support at USD22.47 a troy ounce, the low from April 18 and near-term resistance at USD23.69, the high from April 22.

Futures trimmed gains as the euro fell sharply against the U.S. dollar after weak German business confidence data fuelled expectations for a rate cut by the European Central Bank.

The Ifo index of German business climate fell to a four month low of 104.4 in April from 106.7 in March.

Analysts had expected the index to ease down to 106.2 in April.  

The Current Assessment Index declined to 107.2 from 109.9, compared to expectations for a modest decline to 109.5.

The Business Expectations Index, which measures attitudes toward business prospects over the next six months, declined to 101.6 in April from 103.6, missing expectations for a reading of 103.0

Silver prices were up more than 2% earlier in the session as investors returned to the market to seek cheap valuations following the previous session’s sharp decline.

Prices fell 1.5% to hit a low of USD22.55 a troy ounce on Tuesday after data showed that manufacturing activity in China expanded at a slower rate in April.

China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to a two-month low of 50.5 in April from a final reading of 51.6 in March.

China is a major metals consumer and manufacturing numbers are often used as indicators for future demand growth.

Prices came under additional pressure after Wall Street investment bank Morgan Stanley cut its 2013 silver price forecast by 19% and its 2014 outlook by 15%.

Silver futures have lost nearly 18%, or almost USD5 per ounce, since April 12, as investors exited the market after prices broke below key support levels. 

Prices of the silver metal are down nearly 55% since hitting an all-time high of USD49.81 an ounce in April 2011.

Market analysts have warned that a drop below the USD22.00-level can lead to further losses in the near-term.

Elsewhere on the Comex, gold for June delivery rose 1% to trade at USD1,423.35 a troy ounce, while copper for May delivery rallied 1.9% to trade at USD3.154 a pound.