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COMEX silver pares losses at midday

NEW YORK: COMEX silver pared losses at midday in quiet trade, as the market continued a correction and consolidation of recent rallies, traders said.

Floor sources said players early in the session probed the downside for sell stops, but prices bounced when the stops failed to materialize.

One floor source said modest fund buying helped lift the market, although he noted intraday resistance at $5.635 in the September contract.

At 1240 EDT, September silver was off 6.0 cents at $5.595 an ounce, traded between $5.62 and $5.55. December was off 5.6 cents at $5.665, traded from $5.68 to $5.62.

Tuesday's open interest data, released at mid-morning, showed a modest drop of 1,057 lots in the September contract to 36,841, or 184.2 million ounces. COMEX warehouse stocks Tuesday stood at 147.43 million ounces.

Traders will be watching September's open interest as the contract approaches first notice day on August 31, amid concerns that there may be a squeeze on supplies after recent sharp declines in COMEX stocks.

--Edmund Klamann +1 212 859 1641.-Reuter