Silver has been a mainstay of human civilization for thousands of years now. Along with gold, it was synonymous with money for most of the past and still holds value as a means of investment for many. Silver is primarily mined for industrial purpose, however the demand for the metal is also strong from consumer quarters in terms of savings and investment instrument.
Silver in India
Silver is ingrained in the psyche of Indians with the precious metal being used in religious ceremonies, festivals, weddings and many other cultural events. Even the name of the Indian currency ‘Rupee’ is derived from the Sanskrit word for silver, which is ‘Rupya’. As such,silver rate todayhas always attracted a fair bit of attention from the Indian population and comes second only to gold in terms of precious metals in the country.
Silver is also used as a form of savings and investment in India. It is popular with the rural populace who invest in the metal to secure their savings against inflationary or volatility risks. Silver is bought in the physical form as coins, jewellery, ornaments, utensils etc. and kept as a savings instrument by consumers.
This precious metal is mined as a mixture in ores along with other metals such as copper, gold, lead, zinc, sulphur, antimony, arsenic or chlorine. Silver has been mined since the 4th millennium BC since its use in the making of coins had made it a lucrative business. In fact, silver mines have attracted as much crowd rush as the discovery of any gold mine throughout history.
Silver mining is mainly concentrated in a handful of countries. Industrial by-product accounts for more than 80% of all silver production in the world. Mexico is the world leader in terms of silver production from mines, followed by countries such as Peru, Australia, China, Chile, Bolivia and Russia among others.
Since the 1980’s, silver production has been outpaced by consumption giving rise to rates over the years. Exclusive silver mining forms a paltry 20% of overall silver production, with the main demand arising from industrial needs.
India doesn’t have rich deposits of silver and most of the silver production is as byproduct in the production of metals like zinc, lead, copper and gold. Zawar mines in Udaipur is the largest silver producing mine in the country, while other important sources include Hindustan Zinc Smelter, Tundoo Lead Smelter, Hindustan Copper Limited etc. Most of the silver consumption in India is driven by imports.
Silver rates in India
Silver rates in India through the years have been affected by global price movements of the commodity. Silver rate is closely related to gold rate in terms of price dynamics. As a thumb rule, rise in gold rates have affected similar rate hikes of silver.
Silver rates in India are a result of a large number of variables at play. The rise in industrial sector in the country has increased the industrial demand of the commodity. Other commodities such as gold and oil prices also influence silver rates in the country and globally as well. Apart from these, import duties are also important in deciding silver rates in the country. As most of the silver is imported, import duties have a high impact on final silver rates in India.
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