Silver has always been a traditional form of investment in India. In most rural parts of India, farmers and workers hold their investment in the form of silver bullion coins or thick silver anklets or bracelets that are worn on the body of both men and women. The demand for silver is around 2500 tons per year. Just about 10% of the production is actually produced by the country. 60% of this demand is from the farmers and rural parts of India.
Trading of silver in Indian markets
In India, the primary exchange on which silver can be traded is MCX. Prices for silver bullion bars are quoted and prices for Silver M and Silver Micro are also quoted. In open market operations, silver bullion is extremely lucrative business and is second to the gold bullion that is an extremely vibrant market. It’s estimated that the ‘Multi Commodity Exchange’ is premier exchange for the silver trade carried out in the country.
For trading in Silver Mini, various contracts are also available here the trading unit is for 5 kilograms (kgs) and the price unit is 1 kg. The maximum order that can be executed by the trader is 600 kg. Contracts are also available for trade in Silver Micro. These are better manageable than silver coins. The NCDEX has also introduced trading in silver bullion futures which is done in 5 kg lots. People should buy from reputed sellers of silver bullion. Silver bars have high purity and contain 99.9% of silver.
Global trade in silver
Globally, the largest market for silver bullion trade is the American Precious Metal Exchange or APMEX. Primarily the trade in silver bullion is done in the form of American Silver Eagles, Silver bullion coins, Canadian Silver Maple Leaf, Silver Bars and Rounds and many other types of silver bullion coin.
Given the current financial scenario, globally where the stock and shares market is declining and the property market is longer as lucrative as it used to be, silver is becoming a preferred asset for investment. This is because; it’s one of the easiest ways that the investment can earn profits. After gold, silver bullion bars and silver bullion coins are one of the best investments.
Performance of silver over the past 6 months
Silver has performed extremely well over the last six months in 2011. In fact it has appreciated more than 10% of 70 fiat currencies. For example if you were to invest in oz. of silver in Jan, it would worth around Rs. 1350. The same investment would have jumped to around Rs. 1600 in June. With the current price escalation in all precious metal, silver is also seeing a boom once again.
This is the reason that it makes sense to buy silver bullion and bullion bars. With the current recession and uncertainty in the markets, investments in precious metals such as silver should be part of the investor’s portfolio.
