Silver has witnessed a 30 per cent increase in investment demand this Navratri-Dussehra in comparison with last year. Price of silver, which has remained stagnant for more than two years, started moving upward in tandem with gold since July, drawing a wider set of investors from rural India.
Silver is trading around ?45,500 a kilogram, but is still about 80 times cheaper than gold and far more affordable as an investment or token bullion purchase in rural India, said Nitin Khandelwal, an Akolabased jeweller.
The current gold to silver ratio, which stands at 85, is expected to give a further push to silver prices in the coming weeks. The ratio measures how many ounces of silver it takes to buy an ounce of gold.
Internationally, gold price is hovering around $1,496.79 per troy ounce, while silver is trading at $17.57 per troy ounce. Rahul Mehta, MD of Silver Emporium, said: “Investment demand in the Navratri-Dussehra period has been higher by 30 per cent compared with last year. Demand is coming from urban as well as rural India. While appreciation in price is one of the reasons for this interest, affordability, too, is driving investors. Also, analysts are upbeat about further appreciation in silver prices going ahead.”
However, Mehta pointed out that silver for corporate gifting purposes has lost demand due to a slowdown in the economy.
Silver as an asset class is popular in rural India and tier 2 and tier 3 cities. Khandelwal said that jewellers had stocked silver coins and bars and utensils for Navratri. Once the summer-sown crop is harvested, silver demand is expected to rise further. Silver imports have also gone up significantly in the first five months of FY20. India imported 3,826.8 tonnes of silver in the current fiscal, showing a rise of 25.52 per cent. Silver imports surged 72 per cent in August to 543.2 tonnes.
In the export markets, silver jewellery has done well compared with other gems and jewellery. While the overall exports of gem and jewellery declined 7.43 per cent in the first half of FY20, silver jewellery exports have gone up 76.12 per cent in the same period.
“Handcrafted silver jewellery has huge demand in the global markets. And it is increasing,” Mehta added.
New Source : economictimes.indiatimes
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
