Silver prices hit a lifetime high of Rs 1,04,100 per kilogram in the national capital on Thursday amid strong global cues while gold prices jumped by Rs 430. The gold-silver ratio —denoting how many ounces of silver can be bought with one ounce of gold — is used by the market to gauge future trends as it indicates silver’s current performance against its historical correlation with gold. The recent surge can be attributed to several factors including a weaker US dollar, rising geopolitical tensions and robust industrial demand.
The white metal bounced Rs 2,000 to hit a fresh peak of Rs 1,04,100 per kilogram (inclusive of all taxes) in the local markets on Thursday — continuing its winning run for a fourth straight session. Silver had hit it previous all-time high of Rs 1,03,500 per kg on March 19. Meanwhile spot silver went up nearly 4% in the overseas markets to trade at a 12-year high of $35.80 per ounce.
Experts believe that the prices will continue to rise over the next few months — perhaps reaching Rs 1,14,000 to Rs 1,20,000 per kg by Diwali. However investors should remain braced for a bumpy ride ahead as market volatility remains high amid global uncertainties.
According to Abans Financial Services’ Chief Executive Officer Chintan Mehta, investors are focused on Friday’s US non-farm payroll report for further clues on the Federal Reserve’s monetary policy direction.In addition, any new geopolitical developments could add another layer of uncertainty, once again driving investors toward the safe haven of gold, Mehta said.
“With the trust in dollar decreasing silver appears to be a good avenue for money to move to and the Gold Silver ratio was recently above 1.10 so the only way forward was either silver prices rise up or gold prices fall, and that’s what has happened silver has risen far more than gold,” said Mrinesh Jain Director, Bombay Bullion Metal Hub LLP.