Mumbai, Feb 6: With silver prices galloping upwards, the family silver has come out. On Friday, the busy street of Zaveri Bazaar saw hundreds of people including traders selling their family holdings in the form of silver utensils and jewellery to cash on the rising prices of silver.This has had the first expected sobering effect on the rising prices. On Friday, .999 silver closed at Rs 9,260 per kg, down from Rs 9,350 on Thursday, the highest since almost past six years.
In the last two months, the silver prices have shot up sharply by 30 per cent. Shooting northwards, from Rs 7,290 per kg on November 29, 1997, it touched Rs 8,350 on January 31 following media reports that Warren Buffett, the contrarian investor, has cornered a large chunk of world silver stocks. On Friday, the .999 silver was quoted at around Rs 9,350 per kg, up from Thursday's close of Rs 9,010 per kg.
Domestically, bullion sources say, the daily inflow of silver in Mumbai to the assaying and refining centres has risen to around1,500 tonne from around 300 tonnes few weeks back. This is likely to meet the on-going demand (if any) from industrial users of silver.
However, given the speculative trend in silver market, buyers are likely to stay away, and adopt a wait-and-watch attitude, said Bombay Bullion Association president ML Damani. "Industrial demand is likely to be on hold for the next fortnight," he added.
In the international markets, there has been a sort of selling wave, which, according to trade sources, will have a sobering effect on the galloping silver prices. For example, the yen-based silver futures shed early gains on the Tokyo Commodity Exchange to close lower across the board on Friday, as investors actively liquidated positions to take profits ahead of the weekend.
"Prices advanced in the morning, tracking New York's gains overnight. But large-lot selling by a major trading house changed market mood, and profit-taking gained momentum," said a trader. "But, prices moderately bounced from today's low byclosing, thanks to bargain-hunting demand."
Ironcially, the Mumbai customs department has been unable to take advantage of this situation. It has an inventory of around 8 kg of confiscated silver. The customs department is unlikely to liquidate this confiscated stocks in the market said sources.
During the nine-month period, till December, 1997, the customs department is said to have sold 883.382 kg of confiscated silver recovering some Rs 69.69 lakh.
In the previous year (till March, 1997), it had sold 22,955 kg recovering around Rs 16.50 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
