Silver Prices Plunge Over 40% Amid Drying Investment Demand
Silver refiners and bullion dealers are facing surging stockpiles as fresh investment demand for the precious metal has dried up. The price of silver has fallen more than 40% since January, when it scaled a peak of over ₹4 lakh per kg amid uncertainty surrounding a US-Iran war breakthrough and fears of weak industrial demand.
On Tuesday, silver traded at ₹2.35 lakh per kg in the Mumbai spot market. According to traders and analysts, investment demand has declined across silver exchange-traded funds (ETFs), bars, and coins.
Chirag Sheth, global business head of Public Gold Bullion (SG) Pte., said, 'Investment demand for silver ETFs, bars, and coins has come down. Internationally, prices are unlikely to cross $100 per troy ounce immediately unless the US-Iran war comes to an end.'
James Jose, president of Precious Metals Refiners Forum, added that with no new investors coming in and no immediate signs of prices going up, refiners and bullion dealers are facing a problem internationally as well as in domestic markets.
Carsten Menke, head of Next Generation Research at Julius Baer, said silver is still feeling the after-effects of speculation-fuelled frenzy, which could be keeping investors on the sidelines after many suffered steep losses. Industrial demand is also expected to soften, adding another layer of pressure to the market.