Gold Silver Reports — Rural India makes Most of Silver’s Drop — Demand for silver has soared in rural India with consumers and investors taking advantage of a near 9% drop in prices since the beginning of this month.
Bullion traders and jewellers said they expect the upcoming festivals and the upbeat rural sentiment on account of good monsoons this year to drive up silver demand in the coming days.In the first 10 days of this month, demand for silver was 50% higher over the same period last year, though price of silver was 16% lower last year.
“Rural India was waiting for prices to fall,“ said GV Sreedhar, chairman at All India Gems & Jewellery Trade Federation. “Now that harvesting has started, they have started accumulating silver, which is one of the important asset classes in rural parts. The buying will touch its peak during Dhanteras if prices do not shoot up significantly .“
Silver fell to `41,800 per kg in the physical market on Wednesday .The metal was trading at `45,900 on October 1.
“Import of silver had come to a stand still as there was old silver with jewellers,“ said Haresh Acharya, secretary at Bullion Federation of India. “But in the last few days, there has been good offtake of silver, which has prompted jewellers to restock the metal. In Ahmedabad, we have seen 15-20 tonne of import in last five to six days.“
India imported 2,111 tonnes of silver between January and July , less than half the 4,362 tonne it imported during the same period last year. “We are hoping that imports will improve in the second half because of the drop in prices and rising demand,“ said Acharya.
“The decline in silver price can stop at `40,000 per kg as the US election is near and the political uncertainty arising out of it can help silver maintain the safe haven status,“ — Neal Bhai Reports