The Festival of Lights is around the corner and the excitement cannot be contained any longer.
With this festive season approaching, there is a question on every trader’s mind.
“What’s the commodity that I should be focusing on?”
Well, we have only one answer to tell you about that and that’s “Silver”
You might’ve thought why not gold, but there are a plethora of reasons for that.
Let’s dive into it, shall we?
Silver Trading | Reasons to Invest in Silver this Diwali:
The Indian subcontinent as we all know is one that’s engulfed in its unique love for culture and traditions and this highly affects the rate of silver prices as well with reference to silver trading.
The demand and supply for silver is the main factor and this regulates market prices as well. The following factors influence the silver prices in India.
Festivals:
India is a land of several cultures however, unlike any other religion the Hindu festivals attract a certain kind of traditional value that is linked to commodities like Gold and Silver.
During festive occasions such as Diwali and Akshaya Tritiya, the sale of silver and gold increases by 35%, as it is considered auspicious to purchase silver and gold. This usually causes fluctuations in silver prices in silver trading due to the phenomena of demand and supply.
Wedding Season:
When Diwali arrives, it’s a sign that the wedding season is ready to kick off and this has quite a visible effect on gold and silver.
As Indian brides and their relatives want to shimmer on stage, silver, as well as gold, is purchased in large quantities for gifting to the bride and her relatives. The same principles of demand and supply apply here.
Extracting Silver:
Silver mining is one aspect that is a factor in the silver prices. This consists of the extraction of silver from minerals, starting with mining because silver is often found in intimate combination with other metals and its extraction requires elaborate technologies.
Currently, the cost of extracting silver from the mine is between $11 to $13 and if the base price of silver is also considered to be $10 then its actual price ranges between 20 dollar and 23 dollars.
Industrial Demand:
Another reason for this increase in silver demand can be related to the industrial demand for silver, especially in solar panels. From airports in India to houses, solar panels have become the “Next big thing” in the energy market and the demand for silver plays a crucial role.
According to Silver Stock investor Peter Krauth, there are 2 major factors to the silver demand scenario.
Firstly, the current projection tends to underestimate the volume and pace of new solar installations.
Secondly, there are tax credits and benefits for adapting to solar as well and in many cases, it serves as additional electricity output as well.
The demand for solar panels is increasing day by day due to which silver prices are getting support.
Due to the tensions in the Middle East, there was a huge rise in gold prices but the rise in silver prices was not seen in that proportion. During times of stress, the dollar and gold are considered safe for investment. When the market is in a stressful situation, there’s an increase in both.
Silver Trading | Is Diwali 2023 the Year to Invest in Silver?
Silver has been on the radar for some time now and with Diwali approaching, it might be a great time to trade. Commodity Samachar, Head of Research, Mr. Ankit Kapoor explains” At its current price, silver looks to be a viable investment option, with an average price of almost $20.80 from 2011 to 2023. It’s anticipated that silver will continue to trade within its current range until December, but if it closes above $26, a significant rise to $35 to $44 is projected, with the cup and handle pattern’s breakout being a key indicator.
This is a prime investment opportunity and buying silver between $23 and $21 could lead to a potential doubling of its price in the next three to five years, specifically on MCX. “
For the complete technical analysis on silver watch our YouTube video on the Commodity Samachar channel or you can read about it in Ankit Kapoor’s “The Commodity Specialist” on Linkedin.
Until next time, Happy Trading!!
Commodity Samachar
Learn and Trade with Ease
Also Read: Silver and Solar – A Relationship that’s exceeding demand and expectations, Gold Trading | Is the movement in gold disastrous for the US economy?
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