Silver Prices Up Rs 340, Likely To Test 6-Yr High

Silver prices continued to soar yesterday, with silver of .999 purity gaining Rs 340 to touch Rs 9,350 a kg. The white metal has thus gained Rs 660 in the past two days and is within striking distance of the six-year high of Rs 9,390, quoted on January 16, 1992.

Raw silver .916 purity also rose Rs 165 to Rs 9,200 a kg. The market is rife with rumours that the customs department may unload silver at this level to book profits.

A section of bullion dealers said the market would not be hit if the customs department intervened, since the department does not have substantial stocks. Senior customs officials said this would be the time to test the waters and make sales.

Commissioner of customs (prevention) S S Sekhon said the department sells silver as a matter of routine and had sold some silver yesterday. The customs disposals department sells silver that is confiscated during various intelligence operations.

A section of bullion dealers said silver prices could cross Rs 10,000. Silver prices may cross Rs 10,000/11,000 a kg if the present trend persists in the coming days as the cost of imported silver is over Rs 10,000 a kg. Silver prices in London have touched $7.70 an ounce ... The overseas market is already in the grip of speculators, said M L Damani, president of the Bombay Bullion Association.

A firm trend in the days ahead is expected as there is an acute shortage of ready stock of silver. The customs department cannot come out to sell as it has either nothing to sell or very negligible quantity of silver to offer, said U V Sanghvi, a leading bullion dealer.

National Refinery director S P Sonawala said the domestic silver market is already in the grip of speculators in London. The exorbitantly high prices have turned Indian importers into exporters. Now is the right time to export silver and make quick bucks.

The unofficial forward trade in the parallel silver market at Delhi was suspended due to hectic price rise in the ready market. There are no buyers at the higher level. All the government agencies like MMTC, STC and the customs department have no stocks to offer in the market, said bullion analyst Dinesh Parekh.