High Gold Price Forces Rural Indians to Invest in Silver

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"Silver prices have seen a much sharper price rise in the last 12 months. . ."

After gold prices have sky rocketed and have become unbearably high, people seem to be trying out the other less glittering metal, silver. More Indians have apparently turned to much cheaper silver. Even today, as one official said, rural India invests more into silver than gold.

Silver does give more returns, but is also as dangerous as it is more vulnerable to a bear market than is gold. The stability is in question when one considers silver as an investment option.

Silver prices have seen a much sharper price rise in the last 12 months, gaining 86% versus a 45% gain for gold, at $17.67 an ounce. In contrast gold's latest rally has driven it well past the March 2008 high to a record just above $1,070 an ounce.

The fall from the March high to the October 2008 low was much steeper for silver than goldó60% versus 34%óleaving silver still playing catch up with its more lustrous peer.

Investment demand for silver in India is picking up. HDFC Bank, one of India's large gold sellers, is looking at offering silver bars for sale in some cities because of interest from investors, a bank executive said earlier this month.

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