Silver .999 yesterday witnessed a surge of Rs 490 a kg at Rs 8,250, a 22-month high. Silver .916 followed suit and spurted by Rs 390 at Rs 8,150 a kg. As per the data available, the white metal prices here had touched a record high of Rs 9,390 a kg during January 1992.
Silver prices on the London market recorded an 42 cents increase. It touched $6.23 an ounce from Wednesdays close of $5.81, which was also the intra-day high yesterday. The surge pushed silver prices to fresh 2-1/2 year highs.
The present jump in domestic silver prices is in tandem with the overseas market. The main reason for the spurt in international prices has been the speculative buying at the London market by an active syndicate consisting of banks and commodity institutions. Besides, there is some shortage of physical stock against better industrial demand in the ready market, said U V Sanghavi, a leading bullion dealer.
S P Sonawala, director, National Refinery, said the surge has been due to speculation by a newly formed syndicate comprising a few banks and financial as well as commodity institutions. The syndicate intends to lift silver prices to the $9 an ounce level.
The prevailing high rate of taxation in Maharashtra has forced the local bullion market to move out of the state. This has resulted in a reduction in the turnover of the precious metals, Sonawala maintained. Dealers said the limited availability of the ready stock and gooddemand were instrumental for the price rise. The jump in prices has reduced warehouse stocks on New Yorks Comex futures market to 12-year lows of 12.14 million ounces. Silver prices in the forward market may rise again. However, it is not clear how much room there is for it over $7, a dealer said.