Kolkata: Demand for silver bars has cooled down after prices surged by 24% in the last fortnight, despite bullion dealers offering discounts to push sales. Demand has slid by about 20% in January till now year-on-year, as per industry body India Bullion & Jewellers Association (IBJA).
Silver prices on Friday was at ₹2.82 lakh per kg, while it touched a record high of ₹2.85 lakh/kg on Thursday. On January 1, the price of the white metal was at ₹2.29 lakh/kg. The subdued off-take is despite bullion dealers offering discounts of up to ₹8,000 per kg. Surendra Mehta, national secretary of IBJA, said unless the volatility in silver prices reduces and prices stabilise, the physical demand for silver will gradually fizzle out.
End Sales
Bullion dealers from Zaveri Bazaar-one of the major precious metals trading hubs of the country-said even jewellers have slowed down their purchase of silver as they are not sure about end sales at the current price. India annually consumes 6,000-7,000 tonnes of silver. Prithviraj Kothari, managing director of Zaveri Bazar-based RiddhiSiddhi Bullion, said the volatility is eating into demand for silver bars. “Geopolitical tensions followed by profit-making has put silver on a roller coaster ride. Investors who were parking money in physical silver are now on a wait-and-watch mode,” he said.
Silver fell from ₹2.48 lakh per kg on January 7 to ₹2.35 lakh per kg on January 8 due to profit-making and then again went up. The price again fell on Friday after touching record high on Thursday as US president Donald Trump did not impose tariffs on critical mineral imports including silver. Trump said that he would now pursue bilateral negotiations and floated the idea of price floors.
Chirag Sheth, principal consultant (India) of Metals Focus, an independent global precious metals research agency, said that a lot of silver has moved out of London and is lying idle in the vaults of New York, which is creating a deficit for the metal in the market. “Since there is confusion about what stance will Trump take on silver, the metal is not coming out in the market, even though the industrial demand is rising. That is driving up the price of silver,” he said.
Trump’s Move
Sheth said Indian investors are also waiting on the sidelines to see Trump’s move on silver. “The union budget will be tabled after a fortnight. The buyers are expecting some respite from the government on the precious metal in the form of lowering import duty that will make silver a tad cheaper,” he said. Silver now attracts an import duty of 6%.
Some analysts feel that the rally in silver is likely to continue for some time now.
Taun Satsangi, director and chief research officer at brokerage firm RMoney, said the white metal has already yielded a staggering 24% return in January, the investor is poised for still another substantial gain in 2026. “Profit-booking may lower prices, and any shift in the macro fundamentals may put some pressure on the white metal,” he said.
