NEW DELHI: The monsoons have been a particularly good period for silver. In the key London Metal Exchange, which sets the global standard for most metal prices, silver rallied more than 9 per cent since the start of July. In India, the metal traded for Rs 44,835 at the close of trading last week.
As a bear hug seems to be embracing global markets, silver prices have been rallying worldwide. And the industrial demand for the white metal has increased with rising demand for smartphones, computers and digital televisions in markets like India and china, as silver is an excellent conductor of electricity.
Fears that the US Federal Reserve may cut interest rates, along with fears of a recessionary phase enveloping both European markets and China, have prompted investors to seek a safe haven in bullion markets.
More so as the Gulf region may well be embroiled in another round of war-like games with Iran and the US squaring up for a face-off, with super tankers being intercepted and the US forces being sent to the Saudi Kingdom. Analysts predict that silver is going to be on an upswing in the near future and an investment in the metal may be a good option in a diversified portfolio.
“With increasing industrial demand for silver, its price has been on an upswing. About half the production of silver is consumed for industrial uses unlike gold, where only 10-15 per cent is used for industrial purposes,” said Raman Chadda, a commodities trader.
Silver used as silver nitrate in photography at one time was a key driver for global silver demand. This demand peaked in 1999 and then started to decline with the advent of digital photography.
However, newer uses such as in electronics and in solar cells have taken up the mantle now. Despite thrifty use of silver in solar cells, global photovoltaic demand for silver has grown at a compound annual rate of 20 per cent over the last decade.
A report on silver nanowire market by Global Market Insights Inc shows that the industry revenue is set to rise from $290 million in 2018 to around $1.5 billion by 2025.
“Gold is a costly metal; silver by the gram is obviously cheaper, which is why many Indians invest in silver. For those who like the comfort of physical possession of metals, investment in silver has always been a good option, besides the option of placing orders for deliveries in the commodities market and then selling them,” points out Amit Bannerjee, an independent merchant banker representing several East Asian funds in India.
Buying silver coins has been a favourite form of investment for many, as these are easy to procure at an affordable price and to keep in store either at home vaults or in banks. Accumulated silver coins can also be liquidated at short notice.
Besides reputed jewellers, banks have coin sales programme, which allows buyers to safely buy genuine silver coins. Net-based sellers like e-Bay and Amazon also allow sales and purchase of vintage silver coins such as those minted during the British Raj period or by Indian princes, which adds an antique value to coins’ intrinsic silver valuation.
Those who have the money and want larger investments, silver bars may be considered for investment. Those who are not keen on keeping physical silver can invest in silver through the commodity market. The money invested would be slightly higher as compared to buying physical silver. Contracts can be sold before their expiry on a rise in value. However, this is a more speculative investment and only those who rack the commodities market well should indulge in it.