Silver prices surge to Rs 92,400/kg, nearing last May’s high amid Fed rate cut hopes

Silver prices on Tuesday touched Rs 92,400 per kg mark, the first time since the duty cut and is nearing Rs 96,000 per kg, which it achieved last May. The expectation of a rate cut by the Federal Reserve on September 18 has pushed up the prices of the industrial metal, which is widely used in solar panels, electronics and electric vehicles.

Nearly 40 per cent of the silver imported by India is used for jewellery, while 60 per cent is used for industrial purposes. The silver trade said that the PM’s thrust on solar panels has boosted silver consumption in the country. The demand for silver is rising as people who cannot buy gold because of its high price are buying silver as they are getting a higher volume of silver at a lower price than gold.

The silver trade said that the PM’s thrust on solar panels has boosted silver consumption in the country. Narendra Modi announced the PM Surya Ghar scheme in February this year with a total outlay of Rs.75,021 crore for installing rooftop solar and providing free electricity up to 300 units every month for one crore households.

Rajesh Rokde, vice-chairman of All India Gem & Jewellery Domestic Council said “Silve is expected to shoot up to Rs 1 lakh per kg by Diwali as the industrial demand is increasing for the metal. Even in the jewellery space too, silver is gathering traction as the young generation has developed a taste for silver jewellery.”

Silver imports in the first four months of the current fiscal have soared to 713 tonnes as compared to 288 tonnes in the same period the previous year, according to figures released by Metals Focus, an independent precious metals research consultancy.

Nilanjan Dey, managing partner of investment advisory firm Wishlist Capital said “Indian investors typically see silver as an opportunity — it is a diversifier, helps in better asset allocation, and it is fairly liquid. Silver prices are expected to witness further traction. While short-term volatility is very much anticipated, the longer-term perspective is fairly robust. I expect silver to attract fresh investments in the days ahead. The industrial demand for silver is ascending.”