'Poor man's gold' in doldrums, falls short to entice Indian buyers

NEW DELHI (Scrap Monster) : Elsewhere in the world, crashed silver prices have induced enormous buying interests. On the contrary, silver demand in India has failed to advance. The investment demand for silver has fallen. A major shift from silver jewelry to costume jewelry has resulted in the white metal further losing its luster.

The whole story dates back to early 2012 when the demand for silver started falling. The fall in demand downsized the imports of the metal to the country sizably. The country’s total demand of silver plunged to 3,234 tonnes in 2012 as against 4,437 tonnes in 2011.

The silver imports to India fell by whopping 80% in comparison with 2011.To certain extent, the rise in domestic silver production accounted for the sharp fall in imports. India which was ranked 17^th among global silver producers has managed to secure 13^th position by 2012. Still it was the steeply falling demand for silver that pulverized the imports to drastically lower levels.

All India Gem & Jewellery Trade Federation statistics reveal that the demand for silver has started waning significantly. The southern parts of the country which are normally believed to be large consumers of silver has reported slump in demand. The lust for silver jewelry does not seem to exist nowadays, as there has been a major shift to cosmetic jewelry among customers. Silver utensils are also rarely used.

Unlike gold which attracted massive physical buying after its historic fall during mid April, silver has failed to garner any buying interest in India. There is hardly any demand for silver coins too.

Silver as an investment bet has also lost its appeal. Though the prices of silver are at rock bottom at INR 44,000 per kilogram, investors are not attracted towards it. The slowdown in industrial demand has spurred fears of a further price collapse.

Silver from its peak of INR 75,000 per kilogram two years before has crashed to today’s significantly near to the ground levels.