Silver steals the shine as gold loses lustre
, ET Bureau|
Updated: Oct 24, 2017, 12.39 PM IST
Silver fared better than gold this Dhanteras and Diwali, with demand rising 15 per cent from the festive season last year on increased purchases of coins, idols and silverware.
Volatility in gold prices, coupled with expectations of a price drop in December on chan ces of the US Federal Reserve increasing interest rates, made the yellow metal unattractive to consumers, analysts and traders said.
“Silver has picked up better this year may be because pri ce of the metal is low. Volatility in gold has been more than in silver,“ Shekhar Bhandari, business head for global transaction (banking and precious metals) at Kotak Mahindra, told ET. “And there are 70 per cent chances of Fed increasing interest rates in December, which will make gold less attractive. So people are on a wait-and-watch mode and may pick up gold once prices fall.“ The price of silver on Dhanteras dropped 7.7 per cent to Rs 39,780 per kg on October 17 this year from Rs 43,100 per kg on October 28 last year.
Comparatively, gold prices fell 1.07 per cent from Rs 30,145 per 10 gm last year. “Silver demand has gone up by 15 per cent and price is definitely one of the reasons why people preferred the metal over gold. It is a favoured metal in rural India but this time we have seen urban India pick up silver as well,“ said Ketan Shroff, managing director of Mumbai-based bullion firm Penta Gold.
Trade analyst Bhargav Vaidya attributed the surge in silver to lack of consumer confidence in the economy . There has been good demand for silver coins, idols and silverware this Dhanteras and Diwali, said Sau rabh Gadgil, chairman of PNG Jewellers in Pune. “Gold jewellery buying has been more for the wedding season, which kicks off in November and continues till mid-December.“
India consumed 4,535.92 tonnes of silver in 2016, accounting for 16 per cent of global demand, the Washington, DC-based Silver Institute said on September 27. Silver jewellery and silverware fabrication account for more than half of Indian silver demand annually , it said.
Even though silver is said to be the gold of the poor, silver jewellery is purchased by most income groups, while silverware is bought by the middle and affluent classes. Indian mines produced 396.89 tonnes of silver in 2016, making it the 14th-largest producer globally .
Volatility in gold prices, coupled with expectations of a price drop in December on chan ces of the US Federal Reserve increasing interest rates, made the yellow metal unattractive to consumers, analysts and traders said.
“Silver has picked up better this year may be because pri ce of the metal is low. Volatility in gold has been more than in silver,“ Shekhar Bhandari, business head for global transaction (banking and precious metals) at Kotak Mahindra, told ET. “And there are 70 per cent chances of Fed increasing interest rates in December, which will make gold less attractive. So people are on a wait-and-watch mode and may pick up gold once prices fall.“ The price of silver on Dhanteras dropped 7.7 per cent to Rs 39,780 per kg on October 17 this year from Rs 43,100 per kg on October 28 last year.
Comparatively, gold prices fell 1.07 per cent from Rs 30,145 per 10 gm last year. “Silver demand has gone up by 15 per cent and price is definitely one of the reasons why people preferred the metal over gold. It is a favoured metal in rural India but this time we have seen urban India pick up silver as well,“ said Ketan Shroff, managing director of Mumbai-based bullion firm Penta Gold.
Trade analyst Bhargav Vaidya attributed the surge in silver to lack of consumer confidence in the economy . There has been good demand for silver coins, idols and silverware this Dhanteras and Diwali, said Sau rabh Gadgil, chairman of PNG Jewellers in Pune. “Gold jewellery buying has been more for the wedding season, which kicks off in November and continues till mid-December.“
India consumed 4,535.92 tonnes of silver in 2016, accounting for 16 per cent of global demand, the Washington, DC-based Silver Institute said on September 27. Silver jewellery and silverware fabrication account for more than half of Indian silver demand annually , it said.
Even though silver is said to be the gold of the poor, silver jewellery is purchased by most income groups, while silverware is bought by the middle and affluent classes. Indian mines produced 396.89 tonnes of silver in 2016, making it the 14th-largest producer globally .
