Wednesday, August 17, 2011
Indian Investors Buy Silver
Somantilal Shah, a bullion retailer has pointed out, "There is huge demand from investors and even soaring industrial demand has affected the price of silver in India." Shah added that after silver rose about 175 percent and then dropped back 33 percent, "...everyone has been waiting for a bull run."
Silver is being more and more seen as a cost effective and more affordable bullion investment to gold and although both have risen satisfactorily over the past year, the silver gains in Mumbai have been proportionately higher for silver than for gold.
Local traders also point out that the seasonal buying by local jewellers for the coming marriage season also provided some support to the silver price.
The Akshaya Trithiya Festival, to be celebrated on Friday the 19th of August, always sees a huge demand for gold and silver as Hindus believe that buying precious metals on that day (Friday) will contribute to multiplying their wealth. India imports around 3000 tones of silver each year and this has been rising.
T Gnanasekar, the director, CommTrendz Research & Fund Management commented recently, "Silver happens to be the most happening commodity these days. The unprecedented surge in silver prices and a 30% sudden crash slightly dampened demand. But investors are back, and in India the demand for silver jewellery is rising rapidly."
Silver jewelry, a significant part of the silver trade in India, has been growing by a robust 30-40 percent according to a recent report by the Gems and Jewellery Export Promotion Council in India.
All this coupled with increased demand by industry for silver and silver products means that the price of silver will likely continue to be an excellent investment for Indian investors buying silver.