Amid unsettling geo-political tension and overhang on the likely interest rate regime, precious metals are on a northward journey and seeing no stopping as for now.

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In the previous trade April 11, 2024), Silver May futures contract settled 0.01 per cent higher at Rs 82,620 per kg. Today, the markets in the morning session are shut on the account of Ramzan but will resume trading in the evening session as per the MCX trading holiday calendar.

On a year-to-date basis, silver has gained a substantial Rs 7120 or 9 per cent and marked its new all-time-high of Rs 83,320 per kg in the previous trade.

So what are the factors triggering a rally in silver prices

There is a confluence of factors influencing silver’s rally which are listed below:

Firstly, industrial demand plays a pivotal role, especially in the electronics, renewable energy, and healthcare sectors where silver is an essential component.

Further, as the world transitions towards greener technologies and digitalization, the need for silver in various applications is expected to increase, thereby bolstering its price, said CA Manish Mishra, Co-Founder - GenZCFO

Moreover, silver often serves as a hedge against inflation and economic uncertainty, making it an attractive investment during volatile times. The ongoing geopolitical tensions and macroeconomic factors, such as interest rates and currency fluctuations, also contribute to silver's appeal as a safe-haven asset. 

Outlook for silver

Experts believe that investor sentiment and market speculation can further amplify price movements. So, given these dynamics, the combination of robust industrial demand and silver’s status as a store of value, upward momentum in its price is anticipated in the foreseeable future.