Sun Shines Bright on Sil­ver’s Fu­ture In­creas­ing so­lar power gen­er­a­tion and over­seas de­mand may help sil­ver eclipse gold in 2017

The Economic Times - - Finance & Commodities - Su­tanuka.Ghosal@ times­group.com

Kolkata: Sun is shin­ing on sil­ver. In­creas­ing so­lar power gen­er­a­tion in the coun­try and else­where, along with ris­ing industrial de­mand from the US and China, has pushed sil­ver prices up 8% in Jan­uary and the trend is likely to con­tinue through the year.

So­lar pho­to­voltaic cells use sil­ver paste to con­duct elec­tric­ity, and In­dia’s move to boost so­lar power bodes well for the metal.

“Sil­ver prices are ex­pected to con­tinue mov­ing higher in the year 2017 backed by a strong pick up in the phys­i­cal de­mand as a re­sult of in­creas­ing use in so­lar power glob­ally. In­dia’s in­creas­ing de­mand for so­lar power will fur­ther add to the mo­men­tum,” said Hi­man­shu Gupta, chief mar­ket strate­gist at Karvy Com­modi­ties.

“In­creased industrial us­age on ac­count of a de­mand pick up from China and US is also likely to boost prices and last but not the least the safe haven de­mand be­ing a close proxy to gold is also likely to sup­port the prices in the wake of US pol­icy un­cer­tainty and Euro­pean elec­tions,” Gupta said.

In his bud­get speech on Wed­nes­day fi­nance min­is­ter Arun Jait­ley an­nounced ad­di­tional 20,000 mw of so­lar park devel­op­ment in phase II over and above 10,000 mw al­ready com­mis­sioned un­der the first phase. An­a­lysts ex­pect do­mes­tic sil­ver prices to rise to the range of .₹ 44,500–48,000 per kg in the months to come. Spot sil­ver was trad-

ing at .₹ 42,300 per kg on Thurs­day af­ter­noon on Multi Com­mod­ity Ex­change of In­dia (MCX), up from .₹ 39,136 on Jan­uary 2. In the in­ter­na­tional mar­ket, sil­ver prices are ex­pected to rally to­wards $19 per troy ounce and $21per troy ounce, re­spec­tively, in the next two quar­ters, up from $17.68 per troy ounce now, Karvy’s Gupta said.

In­dia im­ports 8,500-9,000 tonnes of sil­ver an­nu­ally. Haresh Acharya, sec­re­tary of Ahmed­abad-based Bul­lion Fed­er­a­tion, said, “Washington-based the Sil­ver In­sti­tute has said phys­i­cal sil­ver has seen a ma­jor deficit over the past three years as a re­sult of the clo­sure of base met­als mines.

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