Silver demand likely to rise 25% on good rain by Dec
NEW DELHI-INDIA (Aug 21) The household consumption of silver is expected to go up by around 25 per cent this calendar year due to good monsoons. The stock levels are already high due to higher imports in the first half of the year.
The country consumes around 3,000 tonnes of silver every year. This includes both household and industrial demand. Of this, almost 50 per cent, or around 1,500 tonnes are imported.
Silver prices had fell in April along with gold and have seen a low of Rs 38,500 per kg in the Multi Commodity Exchange in June. “Prices came down to the lowest level since November 2010 after going up to Rs 75,000 per kg levels in 2011,” said Tapan Trivedi, senior analyst, Karvy Comtrade.
“Traders and stockists have been making use of the opportunity to slowly accumulate silver in the first half of the year, especially in the April to June period,” said Bachhraj Bamalwa, past chairman, All India Gems and Jewellery Trade Federation.
According to him, during April to June quarter, the imports would have gone up to 850 tonnes. “Usually the imports are higher in the second half of the year during the festive season. This year, the imports were high even in the first half. On a whole, we expect 25 per cent increase in consumption this year,” said Bamalwa.
Good monsoons are expected to support consumption this festive season. The auspicious days to buy precious metals like Dhanteras and Deepavali also would see good demand for silver in rural areas and especially among the farmer community.
According to Trivedi, the positive developments on the global economic front — improved economic indices in the United States, revival signs in Europe and positive data from China — can probably lift the industrial metal counter in the coming months.
Silver prices have already moved up by over Rs 10,000 per kg over the past few days on the back of a weaker rupee. Prices are at present hovering around Rs 51,000 level.
Rising prices of white metal and restrictions on gold imports can improve investment sentiments in the silver counter.