Silver prices fall to Rs 1.5 lakh/kg from high of Rs 1.85 lakh/kg

 

 

 

 

The silver price have come under immense pressure after rallying to record high level of Rs 185,000 per kg on October 17, fell to Rs 150,000 per kg on Friday, a steep drop of Rs 35,000 per kg or 18.92%. Leading jewellers said that silver prices are now witnessing a steep correction as the premium on the precious metal has come down to more realistic levels. There was huge rush to buy silver bars, jewellery, coins, idols, utensils among other things, during Dhanteras and Diwali which further jacked up the prices and created a shortage in the city.

 

According to Rajesh Rokde, Chairman of All India Gems and Jewellery Domestic Council, “Post Diwali, the silver prices have dropped significantly as the large speculators have off loaded their stocks in the market. Therefore, the premium of Rs 35,000 per kg has disappeared with the easing of the supply and original price discovery is what we are looking at today. But, consumers should not get nervous. As this is a healthy correction and once the silver price stabilise in the coming days, it will bounce back to higher levels.”

 

A leading bullion wholesaler, Purshottam Kawle, President of Maharashtra Suvarnakar Sanstha said that there was huge shortage of silver in the bullion markets like Mumbai and Delhi on account of increasing number of people treating silver as an attractive investment option due to its high returns over the year coupled with increasing industrial demand. With short supply of silver everywhere, created a situation where prices got inflated artificially and consumers were willing to pay a premium to get hold of shinny metal because of the festive importance.

 

Once, the high consumer demand fell, the silver prices corrected to Rs 150,000 per kg from a high of Rs 185,000 per kg. Kawle anticipates that the silver prices would eventually climb back and cross the Rs 2 lakh per kg level in the coming months as there is huge consumer and industrial demand in the international market.

 

Another leading jeweller, Kishore Sheth, Director of Batukbhai and Sons Jewellers said that one key reasons behind the drop is profit-taking by investors and stockists. Many investors decided to sell after silver reached record levels during Diwali. This selling pressure naturally led to a sharp pullback. Sheth believes that retreating silver prices is a temporary phase and prices will go higher within the next six months. People look at lower silver prices as an opportunity to buy for further appreciation. (Prices without GST)