Silver futures on Monday declined by Rs 749 to Rs 1,14,132 per kilogram, as traders reduced their bets on the back of weak global cues. The fall in the precious metal’s prices was also attributed to profit booking by participants at the domestic markets.
At the Multi Commodity Exchange, silver contracts for delivery in May decreased by Rs 749, or 0.65 per cent, to Rs 1,14,132 per kg with a business turnover of 15,972 lots. Similarly, the white metal for delivery in July fell by Rs 714, or 0.61 per cent, to Rs 1,15,190 per kg with a business volume of 2,738 lots.
The decline in silver prices at the futures trade was in line with the weak trend seen in the global markets, where it was trading 0.10 per cent lower at USD 17.47 an ounce. Market analysts believe that the decrease in silver prices was due to a weak trend in the global markets, where precious metals fell as the dollar regained some strength.
Silver, being a dollar-denominated commodity, becomes more expensive for holders of foreign currency when the US greenback strengthens. Furthermore, the rise in the dollar index, which tracks the US currency against its major trading partners, also affected the commodity’s prices.
However, the fall in silver futures should not worry investors as it is a temporary phase, and the precious metal is expected to bounce back in the upcoming weeks. This slight correction in prices can be seen as a healthy trend in the market, where investors can take advantage of buying the metal at a lower price.
Experts believe that there are several factors that will support the rise in silver prices in the near future. One of the main reasons is the ongoing trade tensions between the US and China, which has resulted in a volatile global market. This has led investors to turn to precious metals like silver as a safe haven investment, leading to an increase in demand and prices.
Moreover, the global economy has been showing signs of a slowdown, and central banks around the world have been taking measures to boost economic growth. This has resulted in a low-interest-rate environment, making precious metals a more attractive investment option for traders.
Another factor that will support the rise in silver prices is the fluctuation in the stock market. With the market being highly unpredictable, investors are looking for opportunities to diversify their portfolio to minimize risks. Investing in silver can be a beneficial move, as the metal typically has an inverse relationship with the stock market, providing a balancing effect to the overall portfolio.
Furthermore, the demand for silver is expected to increase in the industrial sector, with various applications like solar panels, electronics, and medical equipment relying heavily on the metal. The recent trend of electric vehicles has also increased the demand for silver, as it is used in the production of batteries and essential components.
In conclusion, the decrease in silver futures should not be a cause of concern for investors, as it is a natural correction in prices and does not indicate a long-term trend. The upcoming weeks are expected to see a rise in silver prices, making it a profitable investment opportunity for traders. With the ongoing trade tensions, low-interest-rate environment, and the industrial demand for silver, the precious metal is expected to climb higher, providing a positive outlook for investors. So, stay positive and keep an eye on the silver market to make a smart investment decision.
