The silver market in India is witnessing an unprecedented surge, with prices breaking all previous records. On Monday, the precious metal extended its unstoppable rally for the sixth consecutive session, scaling a lifetime peak.
Historic Rally in Domestic and Global Markets
In futures trade on the Multi Commodity Exchange (MCX), silver price jumped approximately 6% to hit a record high of ₹2,54,174 per kilogram. This monumental rally pushed the white metal firmly past the psychological ₹2.5 lakh mark, a first in its trading history. The bullish sentiment is not confined to India; it mirrors a powerful upswing in international markets.
Globally, silver rates briefly crossed the $80 per ounce milestone earlier in the day, another historic first, before experiencing a slight pullback. Analysts attribute this correction to profit-booking by traders and ongoing geopolitical tensions. The robust buying interest from investors, fueled by strong global trends, continues to drive the market.
How to Invest in Silver in India
As investors seek to capitalize on this explosive rally, understanding the available avenues for investment becomes crucial. Here are the primary methods to gain exposure to silver in India.
1. The Traditional Choice: Physical Silver
Indians have a deep-rooted tradition of investing in physical silver through bars, coins, and jewellery. Culturally, purchasing silver coins or idols is associated with inviting prosperity and is often worn as ornaments. Beyond its sentimental and religious value, it serves as a tangible store of wealth.
While beneficial during a price surge, physical ownership has drawbacks. It requires secure storage space and carries the risk of theft or loss. Additionally, jewellery and crafted coins involve making charges, a cost typically not recovered upon sale.
2. The Modern Entry Point: Digital Silver
Several online platforms now offer digital silver, allowing investors to buy fractional quantities. The metal is stored securely by the company's custodian. This method provides an easy, low-barrier entry for first-time buyers.
However, potential investors should note that digital silver is not heavily regulated. This lack of stringent oversight makes it more suitable for short-term holdings rather than long-term investment strategies.
3. The Secure & Practical Path: Silver ETFs and Mutual Funds
For most investors, Silver Exchange Traded Funds (ETFs) and mutual funds represent the most secure and practical option. A silver ETF is a fund that invests primarily in physical silver and related instruments. To ensure reliability, these funds must hold bars meeting the London Bullion Market Association (LBMA) standards—specifically, 30 kg bars of 99.9% purity.
The net asset value (NAV) of these ETFs is calculated daily, offering transparency. Investors can buy or sell units of these funds anytime during market hours, just like stocks, providing liquidity and convenience.
Key Takeaways for Investors
To navigate the silver rally wisely, a diversified approach is recommended. Consider allocating investments across different avenues based on your risk profile and goals. Silver ETFs offer a regulated, secure option meeting international standards. Digital silver facilitates easy entry but comes with regulatory caveats. Physical silver retains cultural popularity despite practical challenges like storage and security.
The current market dynamics present a significant opportunity. Whether you are a seasoned trader or a new investor, understanding these options is the first step to potentially benefiting from the ongoing bull run in silver.
