Silver Price Forecast By Neal Bhai Reports

Silver Price / Rate in India: Silver is among the most traded commodities in the world. India is no exception and silver, along with gold, forms about 10% of all commodities imports to the country. Silver price / rate in India are directly affected by the global demand and supply scenario of the commodity.

Since the 80’s, the demand for silver has outpaced its supply, with industrial demand accounting for more than half the total consumption. More than 80% of total silver production in the world is as by product of other commodities. Exclusive silver mining accounts for only 20% of the global production.

Factors affecting Silver price in India

There are a lot of factors at play that impact silver prices in India. Even though silver rates have shown a steady increase over the last two decades, the historical trends should not be taken as a benchmark when considering future price volatility. Investment in silver as a commodity has gained steam in the country, and investors need to factor in various variables if they are to make decent profits from silver in the short/long run.

  1. Large investors: The silver market is much smaller than the gold market. As such, large investors or traders can potentially influence silver prices. A point in case here is Warren Buffet buying 130 million troy ounces of silver in 1997 at $4.50/ounce, which impacted market prices.
  2. Oil prices: Mining of silver is an energy-intensive process, and so silver prices are correlated with oil prices, the primary energy source in today’s world. Also, imported silver requires a strong logistics platform backed by consistent oil supply. Volatility in oil prices cause dynamic prices of both gold and silver.
  3. Industrial demand: As India moves towards greater industrialization, the need for silver as an industrial commodity has seen a spike in recent times. This is touted to drive silver prices in the near future and beyond.
  4. Import duties: As silver is primarily imported in India, silver rates are directly affected by the import duty applicable on imports. A higher import duty translates to higher silver prices in India.
  5. US Dollar fluctuation: Silver prices are inversely affected by the USD Index. This means that a strengthening USD can decrease silver rates in India, while a weakening Dollar signals increasing silver prices.
  6. Gold prices: In general, silver prices follow the upward/downward trend of gold closely. If there is a spike in demand for gold leading to increase in its price, silver will follow suit. Similarly, any decrease in gold prices will see a greater decrease in silver prices.
  7. Trade deficits: The greater the amount of imported commodities, the more will be a country’s trade deficit. As the trade deficit increases, the government may take step in to take counteractive steps to curb import of commodities, such as it did in the last couple of years to rein in gold imports.
  8. Inflation: As commodities like gold and silver are preferred choices of customers to hedge their funds in times of financial stress owing to inflation, prices of silver tend to increase when inflation is high.
  9. Large Concentrated Short Position:3 or 4 of the largest silver traders currently hold 90% of all short silver contracts. This sort of concentration of a publicly traded commodity in the hands of few can have significant implications on prices of silver in the short and long run.

Silver Price History

Silver is a metal which is ductile, malleable and lustrous. It is considered one of the precious metals having a unique currency code in the market like gold and palladium. Silver, due to its wide range of properties such as being a good conductor of electricity, etc. Has been widely in demand due to its usage in many industrial applications.

Silver is mainly used in jewellery and silverware in India and it is majorly imported from other countries and the value of the metal has been steady for many years, gradually recovering from its low value. Due to this, silver is among the best stable commodities to invest in due to its stability in prices and as it is considered a safe-haven asset without market dependency.

Those who wish to invest in silver closely follow its trend in various markets and indexes to understand when to buy the metal, when to hold or when to sell. Apart from local demand, the international trend in prices impacts silver rates in India.

Silver is traded on the Multi Commodity Exchange and its pricing depends on demand and the production apart from the value of gold and the international market.

Sterling Silver is a commodity which comprises of 95% silver and 5% copper and is used in electronics, film photography, solar panels and other applications.

Importance of Checking Silver Price in India

Before you buy silver, it is important to first check the silver price in India. This is because the silver rate in India can change from one seller to the next, based on various economic factors both locally and globally. There is also the issue of making charges, which can vary greatly from one jeweler to the other. Buying silver without checking the price can result in loss of money if you buy silver at a higher price from one place when you could get it from a lower price from another.

This is why it is important to check silver prices in India regularly before you actually buy it as it can help you to save money and not result in any financial losses. The best way to track silver rates in India is through online news portals as well as the newspaper. Compare the prices and also compare prices in different shops and then make the final decision of buying your precious silver. This way you can not only buy silver that suits your budget, but also make sure that it is good quality silver that will last ya lifetime.

Silver Measurements

Silver is measured in troy weight and grams. Silver may sell in troy ounces, million ounces, grams, kilograms, tonnes, short tonne, metric tonnes, tolas etc.

Silver fineness is measured as the percentage of silver in the resulting alloy. For instance, a fineness of 900 implies 90% silver in the final product. Fineness is the parts of silver per 1000 parts. Usually copper is added to silver to produce more durable coins. Silver may also be measured in carats similar to how gold is measured.

Silver Demand in India

Silver has the dual usefulness of being a precious metal as well as an industrial metal. World over, silver is primarily traded for its industrial implications, however Indian silver imports are largely for jewelry and silverware. India is among the top 5 silver consumers in the world. About 60% of silver consumption in India is from the rural population who view it as a solid savings commodity.

India does not produce silver in a significant scale and most of the silver has to be imported from outside the country. Moreover, silver demand has been on the rise in major growing economies like India and China during the past few years. Nascent industries such as medicine, manufacturing etc. are picking up demand for silver, and this may soon translate to higher levels of imports.

Silver Commodity Trading in India

Silver as a commodity is traded in three commodity exchanges in India:

  1. Multi Commodity Exchange (MCX).
  2. National Commodity & Derivatives Exchange (NCDEX).
  3. National Multi Commodity Exchange (NMCE).

MCX

Silver is traded in 3 contract types:Silver Mini (SILVERM)

  • Trading units of 5 kg.
  • Base value of 1 kg.
  • Price quotation: Ex-Ahmedabad.
  • Maximum order size of 600 kg.
  • Daily price limit of 4%.
  • Tick size (minimum price movement) of Re. 1 per kg.
  • Upper limit on positions: 60 MT for all silver contracts combined for individual investors. 300 MT or 15% of market wide open positions for a member collectively investing for all clients.
  • Purity grade 999 and fineness 999.

Silver Micro (SILVERMIC)

  • Trades from Monday to Friday.
  • Trading units of 1 kg.
  • Base value of 1 kg.
  • Price quotation: Ex-Ahmedabad.
  • Maximum order size of 600 kg.
  • Daily price limit of 4%.
  • Tick size (minimum price movement) of Re. 1 per kg.
  • Upper limit on positions: 60 MT for all silver contracts combined for individual investors. 300 MT or 15% of market wide open positions for a member collectively investing for all clients.
  • Purity grade 999 and fineness 999.

Silver 1000 (SILVER 1000)

  • Trades from Monday to Friday.
  • Trading units of 5 kg.
  • Base value of 1 kg.
  • Price quotation: Ex-New Delhi.
  • Maximum order size of 600 kg.
  • Daily price limit of 4%.
  • Tick size (minimum price movement) of Re. 1 per kg.
  • Upper limit on positions: 60 MT for all silver contracts combined for individual investors. 300 MT or 15% of market wide open positions for a member collectively investing for all clients.
  • Purity grade 999 and fineness 999.

NCDEX

Silver Futures Contract (SILVERHEDG)

  • Trades from Monday to Friday.
  • Trading units of 30 kg.
  • Price quotation: Ex-New Delhi.
  • Maximum order size of 1,500 kg.
  • Daily price limit of 4%.
  • Tick size (minimum price movement) of Re. 1 per kg.
  • Upper limit on positions: 100 MT or 5% of market wide open positions for all silver contracts for clients. 1,000 MT or 20% of market wide open positions for a member collectively investing for all clients.
  • Purity grade 999 and fineness 999.

FAQs About Silver

  1. Why is the silver rate increasing?
  2. Why are silver coins/bars considered a good investment option?
  3. Is investing in silver a wise decision in 2021?
  4. How much is one gram of silver worth?
  5. How much does one troy ounce of silver cost?
  6. How much is one kilogram of silver worth?
  7. Where can I buy silver bars in India?
  8. What are the advantages of buying silver coins from a bank?
  9. What is the best silver bullion to buy?
  10. What is hallmarking?
  11. What are the benefits of buying hallmarked bullion?
  12. What should one look for in a hallmarked silver article?
  13. A BIS hallmark on the surface of the article
  14. A purity grade (ranging from 999.9 to 999 for fine silver).
  15. Jeweller’s identification mark
  16. Year of marking
  17. Hallmarking centre’s identification mark (logos as displayed on the BIS website)
  18. What are some tips on buying silver?
    • Start small, especially if you’re buying from a dealer.
    • Shop around to find the best rate if you’re buying coins as most dealers will charge a premium over spot price. Find a dealer who charges the lowest price.
    • Always do your research before buying to ensure you’re not being defrauded.
    • If you’re looking to buy and keep, invest in bullion such as silver bars instead of coins, whose value fluctuates depending on its demand from time to time.
  19. Is investing in silver stocks a better idea than investing in the metal?
  20. How liquid is bulk silver and will the dealer buy it back from me?
  21. When is the best time to buy silver?
  22. Will the bank levy a charge or premium if I buy silver from them?
  23. Will I have to pay tax on my silver purchase?
  24. Where can I sell my silver bullion in India?
  25. What are the advantages of investing in silver?
    • In times of economic upheaval, bullion in the form of gold and silver appreciates in price as they assure guaranteed returns on selling.
    • Silver is set to appreciate in value, making it a good investment choice.
    • Silver is cheaper to invest in than gold, enabling all individuals to safeguard their wealth by investing in it.
    • Silver has greater value as it is used in industry for a number of purposes, making it more valuable than gold.
    • Silver reserves are nearly exhausted as the metal has not been mined in decades, creating a ‘silver deficit’ and driving up its value and price.
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Silver Price Forecast By Neal Bhai Reports via @goldsilverrepor
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