Silver spot prices have climbed to Rs 7,700 in October so far and market experts have said momentum will continue in the near term. Silver hit a recent low of Rs 58,118 earlier this month on the spot market. It reached levels of Rs 66,000 on October 26th. The white metal should soon cross the bar of Rs 70,000.
According to market analysts, the strong economic recovery in the United States and China has pushed up white metal prices globally, after limited industrial demand.
Amit Jain, chief global asset class strategist at Ashika Group, said silver price momentum will continue until the end of the festival season, and there may be some correction. after that.
Chart readers have suggested that the bull run should continue.
Kshitij Purohit, head of commodities and currencies at CapitalVia Global Research, said the current short-term target is 100 days SMA, or Rs 66,800. “Breaking this will get a lot of attention from technical traders, ”he added.
Silver is mainly used in the manufacture of products ranging from solar panels to electronics. During the recovery after the pandemic situation eased, it had reduced its peak life span and was just below Rs 78,000. This was fueled by low interest rates, hopes of a stimulus plan, a record influx into ETFs and high liquidity. The metal has outperformed gold lately, thanks to a strong rebound in industrial demand. Other base metals such as copper, aluminum, zinc, nickel and lead have also hit lifetime highs due to supply constraints and declining production in China.
Ankur Saraswat, research analyst, Trustline Securities, said the uptrend has remained intact but silver may see little correction from current highs. “Investors should view silver as an investment when prices correct 5 percent from current levels, for reasonable gains of 10 to 15 percent in the short to medium term,” he added.
Analysts said investors should keep an eye on the dollar, as a decline in the US dollar would benefit silver. The white metal would almost certainly move in the opposite direction of the greenback.
Jain of the Ashika group said the silver would reach Rs 72,000 per kg in the domestic market. However, any unfavorable international news flow could jeopardize this price target, he added.
Ravi Singh, vice president and head of research, ShareIndia, said the money would reach Rs 68,000 by the end of the year. “Investors who have missed the rally so far can reenter the 64000-62000 levels for the 68000 target,” he said.
Inflationary pressures are another key factor influencing price changes, which are likely to push bullion higher.
Purohit of CapitalVia suggested investors buy silver on the troughs, with a target of Rs 70,000 to 72,000. However, “more can be added once a certain retracement enters the price”, he added.