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Silver rates on MCX have crossed  ₹55,000 per kg
Silver rates on MCX have crossed 55,000 per kg

Is silver the new gold? Prices soar to multi-year highs

  • Analysts say that traders are betting on a rebound in global industrial activity amid growing hopes for COVID-19 vaccines, pushing up silver rates

Silver prices soared in Indian markets today, in tandem with firm global rates. On MCX, September silver futures surged 2.5% or 1350 per kg to 55,328 per kg. In the previous session silver had surged 1150 per kg.

In global markets, silver breached the $20 level for the first time since September 2016. Silver jumped 1.6% to $20.22, its highest since August 2016.

Analysts say that traders are betting on a rebound in global industrial activity amid growing hopes for COVID-19 vaccines, pushing up silver rates. On the other hand, increased appetite for riskier assets, tempered gold's advance.

"Silver has rallied sharply in last few days on back of stable gold prices and firmness in most industrial metals. Weakness in US dollar has benefitted commodities at large," Kotak Securities said in a note.

"Silver’s outperformance is also evident from drop in gold silver ratio. The ratio currently stands near 91 levels, lowest since February. Also supporting silver price is strong investor interest. Silver holdings with iShares ETF rose by 118.78 tonnes to a fresh record high level of 16379.08 tonnes."

Meanwhile, supply concerns remain high amid rising virus cases in Mexico and Latin America, say analysts.

"After days of consolidation near $19.5/oz level, silver has given a break past the $20/oz level and we may see some extended gains amid general upbeat outlook for gold," Kotak Securities added.

On MCX, August gold futures were up 0.35% to 49,204 per 10 gram. Since hitting a new high of 49,348 earlier this month, gold prices have remained choppy in recent days.

In global markets, gold held firm near a nine-year peak on expectations of more stimulus.

Gold tends to benefit from widespread stimulus as the metal is widely viewed as a hedge against rising prices and currency debasement. European Union leaders today reached a deal on a massive stimulus plan. In the United States too, congressional Republicans announced plans to seek another $1 trillion in economic relief. (With Agency Inputs)

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