 "Silver shines the brightest: Why demand for the white metal has surpassed gold this festive season")
The silver is the star of the season.
For the first time in history, silver glittered more than gold in the Indian jewellery market. The white metal took centre stage as its demand soared to an all-time high this festive season.
According to a Times of India (TOI) report, silver sales during Dhanteras this year surged by an impressive 30-35 per cent despite a 40 per cent increase in prices, while gold sales experienced a notable decline of 15 per cent compared to last year.
So, why are Indians turning away from traditional gold in favour of silver? Let’s take a closer look at the factors behind this trend.
The shining silver
India’s Diwali and wedding season typically ignite a surge in silver demand, but 2024 has brought unprecedented interest in the white metal.
Surendra Mehta, the national secretary of the Indian Bullion & Jewellers Association (IBJA), reported that silver sales have skyrocketed by approximately 40 per cent this year, despite elevated prices. “We are collating data for silver because this is the first time we are seeing such a huge demand,” Mehta told The Times of India.
In stark contrast, gold sales have declined by 15 per cent, with total sales estimated at around 35-36 tonnes, down from 42 tonnes during the previous festive season. However, the increase in the average price of gold—up by about 30 per cent—resulted in higher sales in value terms, reaching nearly Rs 28,000 crore, compared to Rs 24,000-25,000 crore last year.
This year, consumers are flocking to stores to buy silver coins as token purchases for festivals this season, reported Business Today.
No gold rush
For one, the soaring price of gold has pushed many buyers to consider silver as an attractive alternative.
Basant Kumar Gupta, president of the Dariba Kalan Vyapar Mandal and director of Roop Jewellery House, noted a decline in foot traffic by 30 to 40 percent.
“Gold sales have taken a hit due to skyrocketing prices,” he told Business Standard, highlighting the shift in consumer behaviour.
The World Gold Council has projected that India’s gold demand could reach a four-year low in 2024, primarily due to the unprecedented rise in gold prices. Currently, gold is priced above Rs 80,000 per 10 grams in local markets, while silver is trading above Rs 1 lakh per kilogram.
India’s demand is estimated to range between 700 and 750 tonnes in 2024 from last year’s total of 761 tonnes. Sachin Jain, regional CEO (India) at the WGC, provided these estimates in a Reuters report, indicating a significant downturn in demand.
According to Business Today, the gold futures have shown a return of 106.13 per cent, while silver futures have slightly outperformed the yellow metal, with a return of 116.63 per cent. These better returns have increasingly made it a viable investment option amid rising gold prices.
Huge demand from industries
Another significant factor driving silver’s growth is the increasing demand from various industries, particularly the booming electric vehicle (EV) sector.
Anil Agarwal, Chairman of Vedanta Group, recently expressed his views on the rising demand for silver on X (formerly Twitter).
He stated, “In India, prices have crossed Rs 1 lakh per kg! Demand has doubled from last year. Silver’s demand is being driven not just by its traditional uses but by massive industrial demand. It is now being used extensively in solar panels for renewable energy, in EVs, in advanced healthcare, electronics, and many other technologies.”
Can silver become more precious than gold?
— Anil Agarwal (@AnilAgarwal_Ved) October 24, 2024
Silver is shining.
In India, prices have crossed Rs 1 lakh per kg! Demand has doubled from last year.
Silver's demand is being driven not just by its traditional uses but by massive industrial demand.
It is now being used… pic.twitter.com/JAE4TLlxjr
“At first, making silver was a challenge, but our engineers and technologists made it possible. Today, we are one of the largest producers of silver globally, and we aim to become number one,” he wrote on X.
Furthermore, a report by DSP Mutual Fund cited by Business Today indicated that silver has shown superior performance compared to other precious metals, particularly gold. Its essential role in modern technology—from electronics to semiconductors—combined with anticipated rate cuts by the Federal Reserve, high domestic imports, ETF buying by investors, is driving up its market value.
“People have now begun to understand that there is a real opportunity in investing in silver,” said Mehta.
With input from agencies
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