Silver Shining Playbook Peak 100k in Sight

Silver prices Thurs- day surged to an all-time high, just shy of ₹90,000 a kg, paced by an increase in industrial applications of the precious metal amid shortening odds of an imminent reduction in policy rates by the US Federal Reserve.

Prices climbed more than *2,000, or nearly 4%, through the course of a single trading session to end at ₹87,476 a kg. Within a month, silver prices have climbed more than 5%, resulting in annualized gains of 60%, with analysts attributing increasing industrial demand of silver from the makers of electric vehicles (EV) and photovoltaic solar panels.

High prices have sparked selling of household silver in Mumbai’s Zaveri Bazaar, said Prithviraj Kothari, MD, Riddi- Siddhi Bullions. “People are selling bars, coins and silver utensils to get cash in hand. Also, after a long time, silver is witnessing such a bull run and consumers want to make the most of it,” said Kothari. The trade believes there is still enough room for silver prices to move northward.

Gold prices have steadied and are range-bound between Rs 71,000 and Rs 73,000 per 10 gm, they said. “The uptick in silver prices followed reports of slowing US inflation, fueling expectations of a rate cut in September,” said Jateen Trivedi, VP Research Analyst (Commodity and Currency), LKP Securities. “Demand for silver re- mains robust, especially in the EV and photovoltaic sectors, as consumption of EVs continues to rise, contributing to the bullish trend in silver markets.”

Silver imports climbed about a third in FY24 and stood at 1,561.8 metric tonnes, up from 1,173.89 metric tonnes in FY23. Rising industrial procurement and stable prices had led to an increase in demand for silver in FY24. Silver imports remained positive in April, but slower than in the previous month. Kothari said that it is normal for silver imports to slow ahead of the Lok Sabha elections, with significant curbs in place on high-value movements. “Unlike gold, silver is heavy and is available in kilos. So, that can draw the attention of the authorities,” he said.

Demand for silver jewellery globally is forecast to expand 6%, led by India, according to the Silver Institute and Metals Focus, a precious metals research consultancy based in London. “The high rate of gold is prompting many to go for gold plated silver jewellery in the rural parts of India. That too is driving silver demand,” said Rajesh Rokde of Nagpur-based Rokde Jewellers.

S-ET Image Source: Google

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