Silver has many industrial uses, accounting for more than half of annual demand worldwide over the last five years.This means that economic growth can affect silver price far more than it affects gold. Only 10-15% of annual gold demand worldwide comes from industrial use, the rest going to jewelry and investment.
Silver prices rallied by Rs 750 to Rs 39,900 per kg at the bullion market today on the back of increased offtake by industrial units amid firm global cues.
Gold prices also advanced by Rs 15 to Rs 30,840 per ten grams on sustained buying by local jewellers.
Global economic growth helped lift industrial demand for silver last year for the first time since 2013, but it also contributed to a steep drop in investment demand for the metal, according to a report from The Silver Institute released.
Industrial demand for silver — which has industrial, as well as a precious metal, characteristics — grew by 4% to 599 million ounces in 2017. That was the first rise in four years for silver industrial fabrication, which makes up about 60% of silver offtake.
Silver futures climbed by more than 7% last year. Record photovoltaic growth fed the rise in industrial demand, climbing 19% in 2017 to 94.1 million ounces, on the back of a 24% rise in global solar-panel installations.
Traders attributed the sharp rise in silver prices to pick-up in demand from industrial units and coin makers at the domestic spot market and a firm trend overseas.
Globally, silver rose 0.52 per cent to USD 15.36 anounce and gold 0.10 per cent to USD 1,223.50 anounce in London in early trade.
In the national capital, silver ready bounced by Rs 750 to Rs 39,900 per kg, while weekly-based delivery drifted down by Rs 175 to Rs 38,140 per kg.
Silver coins, however, remained unaltered at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.
In line with the overall trend, gold of 99.9 per cent and 99.5 per cent purity edged higher by Rs 15 each to Rs 30,840 and Rs 30,690 per 10 grams, respectively. It had gained Rs 25.
Sovereign, however, traded at last level of Rs 24,700 per piece of eight grams.