Silver crashes 40%, but buyers vanish; 2,000 tonnes could now pile up in India
Silver prices in India have dropped significantly, yet demand remains low, leading to a surplus of inventory for bullion dealers. Market analysts attribute this to investor caution following losses and broader economic concerns regarding industrial demand in sectors like solar and semiconductors.
Why it matters
The stagnation in the silver market reflects broader economic uncertainty and shifting investment behaviors in India's precious metals sector.
A huge crash in silver prices should have led to a revival in demand, but investors seem to be staying away. And this has raised a fresh worry ahead of the festive season.Silver refiners and bullion dealers are seeing their inventories build up as new investment demand for the metal weakens. The situation comes even as silver prices have dropped by more than 40% from their January peak of over Rs 4 lakh per kg. Uncertainty over a possible breakthrough in the US-Iran war and concerns about subdued industrial demand have added to the pressure.In Mumbai’s spot market, silver was trading at Rs 2.35 lakh per kg earlier this week.Silver Demand WeakensTraders and analysts have said that the slowdown in investment demand can be seen across silver exchange-traded funds (ETFs), bars and coins.
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