Silver smiles with a Golden tooth

Gold and silver prices are breaching there historical records, largely being fuelled by global unrest, inflation and economic volatility. Gold Prices are shying a bit as compared to silver price which is literally on fire. With each passing day, silver is breaching its historic highs and rising by an average 1000 INR on a daily basis.

I happened to visit a jeweler shop last Monday as I was looking for a semi precious stone, out of curiosity I inquiring about the silver and gold prices and was in a state of shock to leant 64250/kg and 21850/ 10 gram respectively. I knew that silver is going to over shine gold in years to come, but will happen so early was never anticipating.

Today 7 days later (Monday 25^th April-2011) purest form of Silver is hovering around 73800 and gold around 22450. Silver has appreciated by 10% whereas gold hardly by 4%. All that will shine is silver

Though I’m not a trader in the precious metal arena but I believe that there are enough sentimental, global and economical factors to give support to the gold and silver prices, and if you ask me will the prices ease up? I will say “BIG NO”.

With the marriage season setting in and “Akshay Tritiya” on 6^th may-2011 there are enough reasons for gold and silver to scale up, Hindus believe Akshay tritiya as the most auspicious occasion to buy gold/ silver and usually start purchasing for marriage and other social functions.

Apart from the demand arising due to marriage season, indications of good monsoon will also add fuel to the demand, again pushing the price higher. Till the monsoon gets over there are no factors which can dilute the demand and so the price.

Of course There is some gap between the end of monsoon and next festival season during which the prices can have a set back only if inflation comes under control. But despite of all our measures we are not able to tame the inflation; these precious metals are considered as the best hedge against inflation and therefore prices will not come down till the point inflation is beyond our control.

Once Diwali season sets in no factor can downcast the prices and rising demand will further fuel the prices, looking at the overall scenario I think silver will touch 1 lac /Kg and gold to 25000/10 gm by the year end.

So if you are investor and having interest to buy; buy it now, before the rally reaches to the point of reversal.

Image source : preciousmetalshop.com