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The Winds of Change for the Silver Cycle

It was the year of 2011 which was the golden year for the silver and in the international markets the silver had scaled to the 49.81 dollar per ounce and in India the silver leaped to Rs73, 600/- per kilogram. The prices of the silver are moving in the limited quarters only specially after 2011 the fall in the international markets and the recession in the markets of the developed nations.This year in the Indian market silver commenced with Rs 35,990/- per kilogram and since then the silver is trading in the limited zone phase. Upon analyzing the international events the rally in silver is farfetched, China being one of the largest importers is facing the recession and same is the saga of the European countries and moreover the Greece crisis dangles and looms large.

The other side of story is that there is a marginal improvement in the US economy which will make the grounds for the increase in the interest rates, and even the descending of the crude prices is a cause of worry for the consumption of the silver. As the mining is on the decline indicating that the investments in the silver will make you going laughing all the way to the bank yielding good returns.

Although in the third quarter the movement will be slow paced but upon the onset of the fourth quarter and the expected improvement in the international markets silver will be posting ahead of Rs40, 000 per kilogram.

The silver happens to be an industrial metal as almost 70% is consumed as the industrial metal and the 30% consumption is investment in the jewellery, at present 19% of the fulfillment is being done by the scrap and the old silver.

The events in the international markets and the global economical scenario and to add to it the forecast and the survey of the world silver survey and the silver institute it can be deduced that any rally in the silver is ruled out at the moment but the turn of the events are definitely on the cards in the last quarter of the year and in the coming 12 months a return between 15-20% is in the offing.

We suggest buying silver at 35,000 levels and on the other hand the supply is expected to be 1016 million ounce against the consumption of 1039 million ounce. Upon analyzing the graph of past 15 yrs 2008-the year when the global recession, from 2009 to 2014 the deterioration in the production as well as the demand was steady, and from the year of 2015 this cycle is rebound. A year of make or break for the silver.