Silver demand outpaces supply, why investors are increasingly attracted to silver this year? Will prices rise further in coming days?
This year's surge in silver prices has created a stir in the market. Silver's profits have reached nearly 60 percent, surpassing gold. Experts believe that silver prices may see further increases in the coming days, reaching the level of 1,70,000 rupees.
Silver was trading at Rs 87,233 per kilogram on the Multi Commodity Exchange (MCX) last year, rising by a strong 60 percent to reach Rs 1,50,000 per kilogram by September 29th. In just the past month, silver prices have risen by Rs 25,000, indicating strong investor demand for silver.
In addition to the domestic market, silver is at a 14-year high in the international market, reaching $47.18 per ounce. Silver has gained 60 percent, while gold has gained 45 percent. Silver prices could further surpass the crucial $50 per ounce mark, potentially pushing silver prices to Rs 1.7 lakh per kg.
Rapid decline in silver reserves
According to rating agency Nomura, sustained demand for silver has led to a rapid decline in reserves. Nomura estimates that silver demand will reach 1,148.3 million ounces in 2025, while supply will remain at 1,030.6 million ounces.
If this demand pattern remains unchanged, known silver reserves are projected to be depleted by 2050. Consequently, silver is considered attractive due to the limited potential for gold prices to rise in the near future.
Investors' Trust in Silver Over Gold
Investors have been increasingly attracted to gold and silver this year. Half of high-risk portfolios are now investing in silver instead of gold, while even those seeking safe havens are investing 20 to 30 percent in silver. Precious metals typically represent 10 to 15 percent of total investment, and gold used to account for almost all of this, but silver has now established a strong presence.
Prakash Kumar Pandey