Ahmedabad: Just like gold, silver prices too have rapidly rallied over the past few days, riding on the surge in industrial demand coupled with a boost in safe-haven investments.
However, despite a handsome 37% rally from July 1 to Tuesday, silver has failed to attract investors owing to the high volatility in prices, said analysts. Silver price saw a spike from Rs 50,050 per kg on July 1 to Rs 68,700 per kg on Tuesday.
“Silver price is highly volatile and may remain within the Rs 70,000 per kg price bracket till the end of the year,” said Hemant Choksi, an Ahmedabad bullion trader. “Therefore, investors are skeptical about investing in the metal. But gold is expected to rally steadily through the year and therefore people are investing in gold, even at a higher price.”
Gold price stood at Rs 55,700 per 10 gram in Ahmedabad on Tuesday. The price of the yellow metal, which was on an upward rally for a fortnight, finally remained more or less steady.
Haresh Acharya, director, India Bullion and Jewellers’ Association, said: “In the international market, silver prices showed a sharp rise. This is because safe-haven investments in silver have gone up significantly.” Acharya went on to say: “Moreover, ever since July, as more markets opened globally, the industrial demand for silver also revived. Both these factors put together pushed silver prices up.” However, Acharya said, the prices are extremely volatile and may crash any time.
Silver is used for manufacturing electronics and even in the renewable energy sector.
“The overall price trend for gold is looking upwards. As a consequence, more people are investing heavily in gold bars and coins and in the form of exchange-traded funds (ETFs),” Acharya said. “The response to sovereign gold bonds which closed last month was also good.”
Retail demand for both gold and silver has dried up at jewellery stores.