Monthly Archives: August 2011

Precious Metals Buying Season in India

 

Creative Commons/Najeeb

India, being the largest consumer of gold and fourth largest consumer of silver highly influences the trade of precious metals. Winter is the season full of festivals and festivals in India are closely related to buying precious metals. Hence, the winter triggers the transactions of precious metals in Indian market and influences the price movements of gold and silver.

According to the experts, during the time between early September to early December, silver prices in India increase by about 11.4 percent on average. The statistics also reveal that November, January, February and May are the best months during which solid gains can be expected out of  silver investments.

Monsoon and Precious Metals Trade in India

In addition to the factor mentioned above, monsoon also plays a key role in deciding precious metals’ prices. Considering that India is agriculture oriented country and almost 70 percent of gold and silver is bought by rural farmers, it is evident that monsoon is the decider factor.

Here is an example that elaborates the statement: Agriculture in India highly depends on Monsoon. Too less or too much of a rainfall indicates loss of agricultural output and finally the financial benefit. But good enough rainfall assures a healthy agricultural output and financial benefits. Hence, when the monsoon comes with good rainfall and when there are good financial benefits, the farmers in India start parking their money in precious metals. Another reason why people or farmers from rural India buy precious metals is that rural communities in India hold very high significance for precious metals like silver and gold. Also, as a tradition, many farmers buy silver or gold blocks and bury them at not-so prominent spot in their farm as an offering or a prayer for a good harvest. Also, it is observed that rural people of India trust their jewelers more than banks!

The monsoon season in 2010 was quite healthy and that resulted in record grain production. Year 2010-11 estimated 241.56 million tons of food grain production, more by 5.4 percent than that of the previous season.

But now, as prices on gold are shooting higher and higher, the majority of farmers or people from India have started buying silver coins, silver jewelry and silver bars as an alternative.

Now, it’s time to wait and watch if the winter of 2011 and healthy crop season of this year results into India’s rural communities demanding for silver more strongly as a way of investments.

 

Increasing Demand for Silver by the Solar Energy Industry

Flat-Plate Photovoltaic Arrays (DOE Photo)

The US debt crisis and European economic woes has sent the silver trading industry into a turmoil as prices kept on declining through much of August. Traders and investors are grappled with fear since the current crisis could cause a decline in demand for industrial silver. Another interesting point that has come forward is the growing inflation rate in China, hindering a country’s growth that along with Brazil and other developing countries has until now ceased further recession dips. Continue reading

Are we heading towards ‘Great Recession 2.0’?

Creative Commons/US Department of Treasury

The slowdown of economic growth in the US and China along with the mountain of debt in the Euro zone has the global economy tottering on the edge of recession similar to the one in 2008. The similar circumstances has elicited panic, driving down global markets. However, the precious metals gold and silver showed gains, though the performance of silver was not as impressive as of gold. Compared to last year the demand for gold increased by 3.23 percent while that of silver increased by 1.85. The less demand for silver is a possible indicator for the slackened demand for silver in industrial purposes. Continue reading

Simplest Strategy to Invest in Silver

The prices of silver kept on rising in mid-July and reached about $40.55 per ounce. However, spot silver prices fell on July 19 and touched $39.53 per ounce because of cut down by $1.022. Many analysts believe that another reason for fluctuating silver price is as a result of investors’ reactions who are concerned about the approaching August 2 deadline for the Eurozone debt, the US debt ceiling and the US Federal Reserve hinting at a third round of quantitative easing (QE3). As a consequence of the market scenarios, the prices of silver might be changing. However, the long-term prospects for valuable metals just like silver are profitable because of debt and loose monetary policies which are there to stay. Continue reading