MUMBAI: With a gain of over Rs 32,000/kg in just four sessions, the unabated rally in silver continued on Friday and the white metal traded at over Rs 2.35 lakh/kg mark in the domestic market, a new all-time high level. The rally in gold also continued, though at a slower pace, with the price moving over the Rs 1.42 lakh/10gram mark.The spurt in the local markets came after these two precious metals traded at new highs in the international market. While silver broke above the $75/ounce mark for the first time ever, gold traded above the $4,550/ounce mark for the first time as well.
Frictions in Venezuela, where the US has blockaded oil tankers and ramped up pressure on the government of Nicolás Maduro, have added to the precious metal’s haven appeal. Washington also launched a military strike against Islamic State in Nigeria in collaboration with the African nation’s government, a Bloomberg report said. Along with gold and silver, platinum prices also hit a new all-time high at $2,400/ounce on Friday.So far this year, silver’s rally has been even more spectacular than gold’s: compared to a 160% rise in the price of the white metal in local markets, gold prices have risen about 80%.Silver’s rise has been aided by a combination of reasons converging at the same time. In addition to the regular demand for silver utensils, biscuits and bars, investment demand in the form of ETFs have also been rising. In addition, industrial demand for the white metal has also been steadily rising because of its superior character as a conductor compared to copper and aluminum. Three fast growing industries—semiconductors, electric vehicles and solar—have been using silver as one of the main metals which is adding to the existing demand at a time when supply has been slow to match that. Silver has been in a multi-year supply deficit, global mine output has lagged demand, and above-ground inventories are declining, according to Jigar Trivedi of Reliance Securities.According to the Bloomberg report, vaults in London have drawn sizable inflows since the Oct squeeze, though much of the world’s readily available silver remains in New York as traders await the outcome of a US Commerce Department probe into whether imports of critical minerals pose a national security risk. The review could pave the way for tariffs or other trade curbs on the metal.“You have a lot of trades or positions on paper: now you need to cover those with physical volume — and there’s not much supply to cover that demand,” said Manav Modi, commodity analyst at Motilal Oswal Financial Services Ltd. “You need to power the paper silver with the actual silver,” he said.
