– Sutanuka Ghosal: Increasing solar power generation in the country and elsewhere, along with rising industrial demand from the US and China, has pushed silver prices up 8% in January and the trend is likely to continue through the year.
Solar photovoltaic cells use silver paste to conduct electricity, and India’s move to boost solar power bodes well for the metal.
“Silver prices are expected to continue moving higher in the year 2017 backed by a strong pick up in the physical demand as a result of increasing use in solar power globally. India’s increasing demand for solar power will further add to the momentum,“ said Himanshu Gupta, chief market strategist at Karvy Commodities.
“Increased industrial usage on account of a demand pick up from China and US is also likely to boost prices and last but not the least the safe haven demand being a close proxy to gold is also likely to support the prices in the wake of US policy uncertainty and European elections,“ Gupta said.
In his budget speech on Wednesday finance minister Arun Jaitley announced additional 20,000 mw of solar park development in phase II over and above 10,000 mw already commissioned under the first phase. Analysts expect domestic silver prices to rise to the range of Rs. 44,50048,000 per kg in the months to come. Spot silver was trade Rs. 42,300 per kg on Thursday aftering at ` noon on Multi Commodity Exchange of India (MCX), up from Rs. 39,136 on January 2. In the international market, silver prices are expected to rally towards $19 per troy ounce and $21 per troy ounce, respectively, in the next two quarters, up from $17.68 per troy ounce now, Karvy’s Gupta said.
India imports 8,500-9,000 tonnes of silver annually. Haresh Acharya, secretary of Ahmedabad-based Bullion Federation, said, “Washington-based the Silver Institute has said physical silver has seen a major deficit over the past three years as a result of the closure of base metals mines.
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