Silver prices are down 9 per cent since the start of the year in India, with futures trading at about 56,000 rupees (US$675) per kilogram. This is about 40 per cent lower compared to a record high of nearly 78,000 rupees per kilogram in 2020.
In contrast, gold prices in the country have remained elevated, at about 52,000 rupees for 10g.
INVESTING IN SILVER
As inflation soars in India, buying gold may not be an option for some people. Many are also betting that the price of silver will return to its highs eventually, making it a good investment.
Jeweller Vrishank Jain said his silver sales are up by 50 per cent compared to last year.
“People are not buying gold, but they’ve started to buy silver, seeing a bigger scope of when silver goes up, they’ll get a better return,” he said.
Mr Naveen Mathur, a director at Anand Rathi Share and Stock Brokers, said: “It has kind of a surrogate demand, which would continue for silver because it’s less expensive than gold, and at the same time serving some purposes.”
But observers pointed out that silver cannot completely replace gold, which still has huge religious and cultural significance in India, as well as being a means of accumulating wealth.
“Markets today are sitting at around 24,000 to 25,000 tonnes of gold – in jewellery across the country, in religious places, temples, and also gold reserves,” said Mr Mathur.
“So this means, I think, we never would be able to take silver to that particular position.”
