Silver turned a surprise winner on Dhanteras, the auspicious Hindu day for purchases, coins touched record level in a year of rebounding economic growth amid a global rally in bullion.
Gold also kept its year-long momentum and is expected by traders to retrace the record 2008 levels. But sales were on lower prices in line with global trends.
Ready silver prices rose by R100 to R37,600 per kg and price for silver coins touched record levels of R43,000 per 100 pieces. Bullion analysts and traders attributed this hike to an increased demand for silver and higher gold prices that made investors with less capital to switch towards it.
“The use of silver is only going to increase in the coming months,” said Jayant Manglik, president, Religare Commodities Ltd.
Industry officials said Indian gold sales fell to 500 tonnes in 2009 after a record 800 tonnes in 2008.
Bhargava Vaidya, proprietor of a Mumbai-based bullion advisory BN Vaidya Associates said people were buying silver because it was still affordable for many compared to skyrocketing gold.
However, it is the coveted yellow metal, which despite having touched the record high levels of R20,120 per 10 grams on October 15 seemed to be sought after on Dhanteras by those with deep pockets.
Gold prices fell for the second consecutive day by R160 and was being quoted at R19,740 per 10 gram on Wednesday.
But gold lovers are not deterred. “The demand for gold coins is almost double this year despite high gold prices. We expect to sell a total of 35,000 gold coins by the end of Dhanteras,” Ved Prakash, director marketing MMTC told HT. Last year it was 15,000.
“Consumers are buying gold though prices are higher than last Dhanteras. We are seeing demand for 24 carat gold, especially in bangles and chains,” Mumbai-based Oro Jewellers director (sales) Avinash Pahuja said.