Silver Scenario

Silver:

Major Characteristics:

  • Silver’s chemical symbol is Ag. It is a grey white metal that is soft & malleable.
  • Silver has unique properties; such as its strength, malleability, ductility, electrical & thermal conductivity, sensitivity, high reflectance of light & reactivity.
  • Silver is unique amongst metals due to the fact that it can be classified as both a precious metal & and an industrial metal.
  • Nowadays, silver is sought as a valuable & practical industrial commodity & as an investment.
  • Silver is an important element of global monetary reserves.

Demand & Supply Scenario:

  • Silverware achieved an increase of 4.6%, owing to stock related gains in India.
  • Demands for coins & medals surged yet higher from 2008, rising by 20.7% to reach a new record high of 78.7 (2,447t) in 2009 on the back of strong investment demand.
  • Scrap supply continued to decrease in 2009 by almost 6% to 165.7, despite a strong recovery in prices over the year.

 Global Scenario:

  • Silver is pre-dominantly traded on London bullion market association (LBMA) & COMEX in newyork.
  • LBMA, as the global hub of over the counter (OTC) trading in silver, is its main physical market. comex is a futures & options exchange; where most fund activity is focused.
  • Silver is invariably quoted in the U.S Dollar per troy ounce.

Indian Scenario:

  • India’s Silver demand averages 2500 tonnes per year; whereas the country’s production was around 206.95 tonnes in 2010.
  • Nearly 60% of India’s silver demand comes from farmers & rural india, who store their savings in silver bangles & coins.

Factors influencing the market:

  • Economic events, global financial crisis, recession, & inflation affect metal prices.
  • Commodity Specific events such as the construction of new production facility or processes, unexpected mine or plant closures; or industry restructuring, all affect metal prices.
  • Government set trade policy (implementation or suspension of taxes, penalties, & Quotas) that affect supply by regulating (restricting or encouraging) material flow.
  • Geopolitical events involving governments or economic paradigms & armed conflict can cause major changes.
  • Silver demand is underpinned by the demand from jewellery & silverware; industrial applications; & overall industrial growth.
  • In India; Silver demand is also determined to a large extent by its price level & volatility.