In a single trading session, silver prices climbed by over Rs 2,000, or almost 4%, closing at Rs 87,476 per kilogram.In the span of just one month, silver prices have risen by more than 5%, translating to an annualized gain of 60%. Analysts attribute this surge to the increasing industrial demand for silver from manufacturers of electric vehicles (EV) and photovoltaic solar panels.
The soaring prices have prompted a wave of household silver selling in Mumbai’s Zaveri Bazaar, according to Prithviraj Kothari, MD of RiddiSiddhi 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,” Kothari told ET’s Sutanuka Ghosal.
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Market participants believe that there is still significant potential for silver prices to continue their upward trajectory. Meanwhile, gold prices have stabilized and are currently trading within a range of Rs 71,000 to Rs 73,000 per 10 grams, according to industry experts.
Silver prices have seen a surge following reports of a slowdown in US inflation, leading to expectations of a potential rate cut in September, says Jateen Trivedi, VP Research Analyst (Commodity and Currency) at LKP Securities.
“Demand for silver remains robust, especially in the EV and photovoltaic sectors, as consumption of EVs continues to rise, contributing to the bullish trend in silver markets,” he told the financial daily.
Silver Prices Jump
In the fiscal year 2024, silver imports in India witnessed a significant increase of approximately 33%, reaching 1,561.8 metric tonnes compared to 1,173.89 metric tonnes in the previous fiscal year. The surge in demand for silver in FY24 can be attributed to increased industrial procurement and stable prices. Although silver imports remained positive in April, the growth was slower compared to the previous month.
Kothari says that it is common for silver imports to experience a slowdown prior to the Lok Sabha elections due to the implementation of substantial restrictions on high-value movements. He noted, “Unlike gold, silver is heavy and is available in kilos. So, that can draw the attention of the authorities.”
The Silver Institute and Metals Focus, a London-based precious metals research consultancy, predict that the global demand for silver jewellery will grow by 6%, with India leading the way. Rajesh Rokde of Rokde Jewellers in Nagpur commented, “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.”