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
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.