Silver gains Rs 7,800 in four weeks! Did you miss the bus?

New Delhi: Precious metals have gained their mojo back ahead of the busy festive season. In the bullion market, silver outperformed gold recently.

The spot prices of silver have soared as much as Rs 7,700 in October thus far and market experts said the momentum would continue in the near term. Silver hit a recent low of Rs 58,118 at the beginning of this month in the spot market. It marched to the Rs 66,000 levels on October 26. The white metal is expected to cross the Rs 70,000 mark soon.

According to market analysts, strong economic recovery in the US and China has fired up the white metal’s prices globally, after a range-bound industrial demand.

Amit Jain, Chief Strategist-Global Asset Classes at Ashika Group, said buoyancy in silver prices would continue till the festival season is over, and there could be some correction after that.

Chart readers have suggested that the bull run is likely to continue.

Kshitij Purohit, Lead Commodity & Currency at CapitalVia Global Research, said the current short-term target was 100 Days SMA which is at Rs 66,800. “Breaking this will attract a lot of attention from technical traders,” he added.

Silver is mainly used in manufacturing of products ranging from solar panels to electronics. During the recovery after the pandemic situation eased, it had scaled its lifetime peak and was just shy of Rs 78,000. This was fuelled by low interest rate, hopes of a stimulus package, record inflow into ETFs and high liquidity. The metal has outperformed gold of late, thanks to a sharp rebound in industrial demand. Other base metals such as copper, aluminium, zinc, nickel and lead are also at lifetime highs due to supply constraints and a fall in production in China.

Ankur saraswat, Research analyst, Trustline Securities, said the uptrend remained intact but silver might see little correction from the current highs. “Investors should consider silver as an investment when prices correct by 5 per cent from current levels, for reasonable gains of 10-15 per cent in the short to mid-term, ” he added.

Analysts said investors should keep an eye on the dollar as a fall in the US currency would benefit silver. The white metal would almost certainly move in the opposite direction of the greenback.

Jain of Ashika Group said silver would hit Rs 72,000 per kg in the domestic market. However, any adverse international news flow might put this price target at risk, he added.

Ravi Singh, Vice-President and Head of Research, ShareIndia, said silver would hit Rs 68,000 by the end of year. “The investors who have missed the rally so far may again enter at the levels of 64000-62000 for the target of 68000,” he said.

Inflationary pressures are another key factor influencing the price changes, which are likely to push the bullion higher.

Purohit of CapitalVia suggested investors buy silver on dips, with a target of Rs 70,000-72,000. However, “one can add more once some retracement comes in the price,” he added.