After 4 pm, Zaveri Bazar, a lane near the city's Jumma Masjid, sees a sudden burst of activity. Corporate executives wearing suits and carrying laptops, middle-rung employees with untucked shirts, uniformed peons who appear to be on a mission for their bosses and some women press their way through the crowded quarter.
They have come to Mumbai’s main gold market to buy its wares before the shops close at 6:30 pm. For the past four months, though, many have been buying not gold, the market's mainstay, but silver.
“Earlier, my customers were mainly representatives of manufacturers of silver jewellery and articles,” said Vasantrai Mehta, 69, a bullion merchant. "Now, I have all kinds of customers — retail investors who want to buy silver bars as an investment. We are selling close to 150 kg of silver every day."
People began taking an interest in silver after the metal's price began rising. It has risen to around Rs 43,000 a kilogram from about Rs 23,000 in February because of a spurt in industrial demand, which constitutes the bulk of sales (see graphic on the right.)
Bullion merchants say prices can rise much further. For one, unlike gold, which is now at an all-time high of $1,430 an ounce, silver is still below its all-time high of $45 an ounce, hit about two decades ago. Also, interest in the metal has increased after the National
Spot Exchange for silver trading opened in April, allowing retail investors to invest in the metal online.
(See How to add a silver lining to your portfolio on the right.)
"Global investors are withdrawing from the stock market because returns are very low," says Anjani Sinha, the chief executive officer and managing director of the Exchange. "Fixed deposits are also not very profitable. So people are pumping in money into commodities."
Trade on this exchange has risen to Rs 150 crore a day from Rs 10 crore when it opened. It clearly outshines the physical trade, but many people still take comfort in taking physical possession of the metal.
Smita Parkh, a housewife who has been investing in gold for the past decade, has over the past year making the one-hour journey from her home in Orlem in Malad to Zaveri Bazar to buy silver articles and jewellery.
"Last month, I went back to sell an item because I thought the price was right," she says.
Surendra Shah, 77, who has worked at the bazaar’s Narrondass Mohandas bullion merchants for the past 52 years, testifies to the
increased interest in silver.
Sitting on a mattress in the shop, dressed in a regulation white kurta-pyjama, he reads a note brought in by a young boy that specifies how many silver bars his boss wishes to buy. “People don’t want to be left out,” he says and then leans over to whisper conspiratorially: "You too should invest in silver. I may or may not live to see it, but in five years, the metal will cost Rs 3 lakh a kg."