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Catch the glitter: Silver up 11% YTD on import volume, likely to outshine gold in near-term; How should you invest?


Ahead of the auspicious Akshaya Tritiya, silver is shining bright among other precious metals in the commodity market and is likely to outperform gold in the longer period, according to domestic brokerage house Motilal Oswal Financial Services Limited. According to recent data, gold and silver have experienced notable year-to-date (YTD) gains of 13 per cent and 11 per cent, respectively, from last cycle of the new year that starts with the Akshaya Tritiya.

According to commodity market analysts, the most surprising factor for 2024 has been the imports of gold and silver. Imports of the precious metals have been over 150 tonnes for gold and 3,000 tonnes for silver YTD respectively.

The rise in imports could likely be on the back of the Comprehensive Economic Partnership Agreement (CEPA) deal with the United Arab Emirates under the benefit of one per cent or the import duty benefit that the market participants get under other bullions articles like granules or findings.

Also Read: Akshaya Tritiya 2024: Gold prices dip a bit ahead of festival — is this the right time to buy precious metal?

Gold and silver prices today

Gold steadied on Wednesday while investors awaited US data for clues on potential rate cuts by the Federal Reserve, though a slight uptick in the dollar limited any upsides. Spot silver gained 0.6 per cent to $27.42 per ounce. Spot gold was little changed at $2,315.19 per ounce. US gold futures also held steady at $2,323.30.

Coming to domestic prices, gold futures last traded 0.04 per cent higher at 71,180 per 10 gram on the multi commodity exchange (MCX). On the other hand, silver futures last traded 0.19 per cent higher at 83,037 per one kg on the MCX. The week remained characterized by range-bound trading due to the absence of major data and sideways market patterns.

‘’Interest rate updates will likely influence prices in the near future. Currently, MCX gold is expected to trade within the range of 70,000-72,000,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

Comex gold prices pared early gains and closed lower on Tuesday, tracking gains in the greenback amid hawkish comments from a US Federal Reserve official. Fed Reserve Bank of Minneapolis President Neel Kashkari said it was likely the US central bank would keep rates where they were “for an extended period of time” and declined to rule out future hikes.

Also Read: India’s IIFL Finance facing liquidity crunch after gold loan business curbs: Report

How should you invest in silver?

Motilal Oswal continues to maintain a positive stance for both gold and silver and recommends buying on dips with target towards of 75,000 for gold and 1,00,000 for silver on domestic front and $2450 for gold and $34 for silver on Comex. Both gold and silver has registered a positive advance in Q1’24, matching or even surpassing gains in other significant asset classes.

In Q1’24, the brokerage has achieved the annual target for gold and met more than 85 per cent of annual target on silver. The middle-east geo-political issue is already priced in. However, the bullion remains supported by demand from central banks, who are diversifying their FX reserves with gold, said analysts.

‘’Expectations are for gold and silver prices to remain volatile. Gold finds support at $2294-2278 with resistance at $2328-2342, while silver’s support lies at $26.90-26.75 and resistance at $27.28-27.41. In terms of INR, gold has support at 70,940 and 70,760, with resistance at 71,440 and 71,620. For silver, support levels are at 82,140-81,580, while resistance is at 83,640 and 84,080,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

Disclaimer: The views and recommendations above are those of individual analysts and broking companies, not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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