In metals we trust: Sizzling silver surges past $100/Oz
HYDERABAD & MUMBAI: Silver’s unprecedented surge continued Friday. In late trades on the New York Commodity Exchange (Comex) the price of the white metal crossed the psychologically important $100 per ounce (Oz) mark for the first time in history. Gold, which has gained at a much slower pace than silver in recent months, neared the $5,000/Oz mark.In the domestic market in late trades on MCX, silver futures contracts for March delivery was trading at Rs 3.4 lakh/kg, a new life-high level while the high for gold futures for Feb delivery was at close to Rs 1.6 lakh/10 gm. Both were all-time high levels. In Mumbai’s spot market for bullion, silver traded at about Rs 3.3 lakh level while gold was at Rs 1.55 lakh.A combination of factors have propelled the rally in the two precious metals. Tense geopolitical situation, especially due to sudden and unexpected decisions by US President Donald Trump is leading to economic uncertainties across the globe. Such decisions are also prompting investors to lose their faith in fiat currencies and move towards real assets, analysts said. Industrial demand for the white metal, mainly from fast-growing industries like EV, semiconductors and solar, is also adding to the supply-demand mismatch, they said. According to Saumil Gandhi of HDFC Securities, strong investment flow and strong physical demand combined with the weakness of the dollar, strong retail and HNI buying, and a historic short squeeze in silver are leading to the sharp rise in its price. “The US dollar index has fallen more than 1% this week, supporting bullion as investors rotated into real assets amid shifting US-Europe tensions linked to Greenland and concerns Europe could leverage its holdings of US assets. In silver, China’s tightening export controls and constrained availability have added to the squeeze,” Gandhi said.Global investors’ tumbling belief in the dollar as an universal currency is a serious issue in determining the price of silver, industry veterans said.
