Silver to hit Rs 21,000 a kg soon

Silver prices are likely to touch Rs 21,000 a kg in the next two weeks on renewed buying from all quarters especially, crude oil investors.

Experts believe crude oil offers limited options for profitability and, hence, funds are diverted to precious metals, including silver.

Silver prices firmed up 5.20 per cent last week on strong global cues and firm support from gold and the energy sector. The dollar's weakness against all major currencies has also helped metals zoom globally. In Mumbai's spot market on Monday, silver was quoted at Rs 19,200 a kg (excluding 1 per cent VAT).

The metal was traded with a weekly gain of Rs 917, or 5.07 per cent, at Rs 19,003 a kg for near month contract on MCX. Ex-Mumbai, however, silver is quoted at Rs 18,900 per kg. On Nymex, the metal, for December delivery, rallied 37.50 cents, or 3 per cent, on Friday to finish at $14.28 an ounce.

"The trading volume has gone to zero in the local precious metals market despite festivals being round the corner. Slipping demand has persuaded me to project an immediate price correction," said Suresh Hundia, president, Bombay Bullion Association.

Prices in the domestic market are guided by global developments. Indian demand factors most in price movements worldwide.

A majority of the silver in India is used for applications in photography, the largest usage category, electroplating, sterling ware, jewellery, dental and medical supplies, mirrors, brazing alloys and solders, electrical and electronic product batteries etc.