All that Glit­ters isn’t Gold. It’s Sil­ver

Heavy de­mand from China has helped sil­ver rise 26% this year com­pared to gold’s 19% growth. The fu­tures mar­ket is ex­pected to at­tract more in­vestors com­pared to phys­i­cal de­mand for the metal, feel bul­lion traders

The Economic Times - - Commodities Plus - Su­tanuka.Ghosal @times­group.com

WHAT AN­A­LYSTS SAY We see con­sol­i­da­tion in prices to $16-16.5 per ounce and 38,500 per kg, post which they can again re­sume their up­side to­wards $19 and 43,500-44,000 per kg

Kolkata: Sil­ver has given a 14.3% re­turns in April alone, over the first quar­ter of 2016, rid­ing on Chi­nese de­mand which is likely to spark in­ter­est among in­vestors who had missed the re­cent rally in the metal.

“The metal is on con­sol­i­da­tion mode and the cur­rent up­side is ex­pected to con­tinue, and in­vestors are likely to par­tic­i­pate in the metal in the com­ing weeks,” Hi­man­shu Gupta, se­nior mar­ket strate­gist, Karvy Com­modi­ties Broking, told ET.

Sil­ver prices ral­lied to 11-month high pre­vi­ous week, test­ing highs of .₹ 41,421 per kg on the MCX and $17.68 per troy ounce on the Comex. Though the fu­tures mar­ket is ex­pected to at­tract in­vestors, the phys­i­cal de­mand for sil­ver will be less, bul­lion traders said. Mukesh Kothari, di­rec­tor of bul­lion firm RSBL, said, “Im­ports are ex­pected to be 10% lower as in­dus­trial de­mand has not picked up in In­dia and also the high price may im­pact ru­ral buy­ing. Two suc­ces­sive droughts have af­fected the pur­chas­ing power of ru­ral In­dia.”

In­dia had im­ported 7,759 tonnes of sil­ver last year.

Gupta said that sil­ver has risen

VASU by about 26% this year, com­pared with gold’s al­most 19%. The op­ti­mism build­ing in China af­ter pos­i­tive in­dus­trial pro­duc­tion, ris­ing ex­ports, higher prop­erty sales in the first quar­ter, and growth in fresh loans have trig­gered a ral- ly in broader me­tals, in­clud­ing sil­ver. With al­most half the in­dus­trial de­mand for sil­ver com­ing from China, prices have shot up af­ter re­cent in­di­ca­tions that China’s econ­omy is sta­bil­is­ing af­ter a tur­bu­lent start to the year.

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