Silver was quoting above Rs 50,000 a kg in Mumbai's physical market in opening trade today, a level it had achieved six years ago. The price of the metal in the global market, at $19.4 per ounce, was at a three-year high following looming uncertainties about Brexit, the US-China trade spat and slowing growth, amid increasing silver bets made by international traders. In Mumbai’s Zaveri Bazar spot market today, silver opened at Rs 50,125 a kg while standard gold crossed the Rs 39,000 level for the first time to quote at Rs 39,091 per ten grams.

After adding local taxes and GST, gold is now quoting at above Rs 40,000, while silver is closing in on Rs 52,000. Demand for bullion has almost dried out at these price levels.

There was a surge in futures contracts too.

“December Silver prices on the MCX hit Rs 51,425, registering the third highest gain on week-on-week basis during the past 10 years, as nervoouseness over Brexit, Hong Kong and US-China relations forced traders to shift to defensive assets,” said Ajay Kedia, director, Kedia Commodities.

However, consumers are staying away at these levels and traders and stockists are importing the white metal only to meet critical demand. "They see the prices are very high and are not ready to stick their necks out to buy silver,” said a large importer based in Mumbai.

Internationally, ratio traders have increased silver bets, causing a sharp jump in the metal's price. The movement was reflected in India, with the decline of the rupee against the dollar in the forex market. The gold-to-silver price ratio reflects the strength of the metals relative to each other. Traders were so far bearish on silver because of the industrial slowdown. As a result silver was underperforming gold and ratio went up to a 25-year-high of around 93 a month ago. Since then it has been correcting and is now around 79.5.

Says Kedia: “As gold broke out to the upside, the silver-gold ratio probed around the modern-day record high. The long-term average for the silver-gold ratio is around the 55:1 level. Silver has just begun to show signs of bullish life and has been slowly playing catch-up with Gold. Yesterday, the ratio breached the 78:1 level, and it has been trending lower as silver has been making higher highs.”

Traders and funds are buying silver and some may be exiting gold or may just holding on to whatever they have. In India, demand is virtually absent.