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Gold is up about 40% this 12 months in India. Silver: 65%. And bulk of the positive factors in silver has come in current weeks. In about three weeks, silver has rallied about 45% in India. A rally in valuable metallic prices, hopes of restoration in industrial demand and robust investor inflows are a few of the elements which have fuelled a rally in silver prices. The rally in gold and silver is additionally supported by a weak greenback, which has hit a two-year low towards a basket of its key rivals.
Gold prices in India at this time crossed ₹56,000 per 10 gram in futures market whereas silver nearly touched ₹78,000 per kg.
“Silver is supported by firmness in gold, recovery in industrial sector and strong investor inflows. Gold has surged to record high level shifting some buying interest in silver which has a strong positive correlation with gold and is much cheaper,” Kotak Securities stated in a observe.
“Manufacturing activity across the globe is showing improvement which improves outlook for silver’s industrial demand. Silver holdings with iShares ETF is at a record high level,” the brokerage stated.
“The spot gold silver ratio is near 72 levels, the lowest since 2017, highlighting silver’s outperformance. Silver has risen almost over 60% so far this year however almost all of it has come in last three weeks.”
Kotak Securities says that although constructive elements persist they don’t justify the sharp positive factors seen in such quick span of time in silver.
“While the momentum is still positive, the rally is unlikely to sustain for long and market players need to be cautious. Focus may continue to be on economic data from major economies and development relating to US stimulus talks, US-China tensions and coronavirus-related development.”
Geojit Financial in a observe stated: “Rallies in silver would continue as long as prices stay above $26. Next upside target is seen $35 as it convincingly cleared $28. However, a direct turn below $23 would negate the bullish momentum and take prices lower.”
Silver consumption in India is set to halve in 2020 as patrons, primarily from rural areas, skip purchases amid surging prices and a weak financial system, Bloomberg reported, citing analysts. India imported about 6,000 tons of silver in 2019.
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