Why Indian Traders Are Silver-Shy

Source:

". . .silver is not rising in the Indian market as fast as internationally."

Unlike in European nations like Germany, in India bullion traders are shying away from silver because of the risk involved in it. They feel that silver prices have gone up drastically in the past few weeks and at any moment it can crash and they may have to suffer losses.

In the case of gold, the scene is different. Traders are stockpiling gold while they are not ready to trust silver because of the unpredictability of the metal.

In the recent past, silver prices have risen sharply raising doubts about its future trend. Only a considerable fall in silver prices can bring consumers back into the market.

Gold and silver prices in India had hit lows during November last and since then have risen by 24.86% and 36.2%, respectively.

Internationally, during the same period, silver prices have risen 46.78% while gold went up 17.36%.

This means silver is not rising in the Indian market as fast as internationally. Further, the international silver prices have risen faster than gold. Post-September 2008, huge imports of the white metal took place in India, keeping a check on prices. This has led to a precarious situation in the silver market. Traders have turned risk averse to stocking silver and demand is ebbing.

Early estimates suggest silver import may be around 3,000 tonnes during the whole of 2008 with a large part (nearly 3/4) of it being imported during the last four months of 2008.

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