Gold precious, but silver shines more for investors

Silver has always been the second choice for consumers after the glitter of gold, but when it comes to investors the yellow metal is giving just about half the return compared to its whitish-grey cousin. After outpacing gold's return of just about 14 per cent with over 30 per cent appreciation in 2007, silver is still maintaining a significant lead this year. The average return from investment in silver has grown by about 18 per cent since January this year, as against about 12 per cent for gold in the same period, the experts said. "Buoyed by industrial demand, silver prices are rising significantly in line with gold. In fact, volatility in white metal have been much higher than gold this year both in global as well as domestic market," brokerage firm Karvy Comtrade's Research Head Harish G said. Spot silver prices in the country, which were ruling at Rs 19,000 per kg level in January, have touched up to 27,000 per kg level. In the same time, gold rallied from Rs 10,800 per 10 grams to over 13,700 per 10 grams in the recent months. In the coming months also, the analysts expect silver to maintain a lead over gold in terms of return appreciation. "The size and depth of the market is a prime force behind the rise of prices. "Further, silver is presumed to be the cousin of copper and when the mining cost of base metals, especially copper goes northward, the cash cost on silver automatically pushes upwards. As a precious metal, factors contributing to gold keep this metal also afloat," said another brokerage firm Kotak Commodities Vice-President Si Kannan. Silver metal is not only used for a currency hedge, but also in industrial and technology sectors.
Avdhoot Investment