Saturday, July 11, 2020

Silver jumped 50% in 4 months, Are there still Earning Opportunities?



Silver prices have risen by more than 50 percent on MCX since March levels. Around 3 pm on Friday, the September futures price of silver on MCX was trading at Rs 51516 per kg with a rise of Rs 425 or 0.83 per cent.

Motilal Oswal's AVP (Commodity and Currency) Amit Sajeja says that in 2019, global investment in silver increased by 12 percent to 18.61 million ounces, which is the biggest annual increase since 2015. In addition, silver ETF holdings climbed to a record 1.13 billion ounces in 2019 and the trend continued in 2020. 

This indicates that the trend of global investors towards silver has increased continuously.

He says that due to negative bond yields, trade war between the US and China and Indo-China tensions, there are signs of further rise in precious metals. He says that in the next 6 to 9 months, silver prices in the overseas market can show a level of $ 21 an ounce. Talking about MCX, silver prices can climb up to Rs 57000-58000 per kg during this period.

According to Prathamesh Mallya, AVP (Commodity and Currency Research) at Angel Broking, central banks may continue to take further stimulus measures to overcome the corona epidemic.

 This will weaken the dollar and silver can benefit from it. He says that for the next 5-6 months, MCX should be purchased between 50 thousand- to 50 thousand 500 rupees in silver with a target of Rs 57 thousand per kg.

Kotak Securities has said in a note that due to the rise in the price of gold, customers in rural India have increased the purchase of silver because gold has gone out of people's budget due to the rise in the price. 

The note further states that this also indicates that silver may be the preferred choice of investors in the coming days.

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