Silver – a standalone investment shall see an out-burst in prices once again. As the demand for solar panels and electrical vehicles are shooting up rapidly, some professional traders strongly believe that silver prices will grade up by 40,000- 41,000 a kg by this mid- year. The spot market in 2017 – end, metal prices close at Rs. 39,237 a kg.
Price Action Analysis of MCX Silver in Daily chart
Every year there is a drop down of 5-6 percent in silver used in solar cells but still it compensates 20 percent of growth in the overall market.Research showcases about 500 tones of silver every year is originated by Hindustan Zinc which has a dynamic demand in the domestic market.Seeing the growth opportunity, the company is raising its silver production to 1,000 tons over the next 3-5 years.Not only the demand and but also prices for silver has been lifted up during the past few weeks. This bid is broadly soaring from solar panel and electric vehicle manufacturers.
As per domestic market out-come in 2017, Silver prices rallied till Rs 43,990 a kg and then declined to Rs 35,460 a kg towards the year end. Thomson Reuters GFMS survey pointed towards 23 percent of demand for silver used in solar photo voltaic applications.
But there a downside in this thesis, Using of silver in solar panels will be reduced if Silver prices become too expensive and might be replaced by copper. However, the gigantic increase in battery module production is leading to high consumption of silver.Whenever silver prices rise, people switch to alternatives like copper and aluminum. Ultimately, it depends on the fluctuation in commodity markets. So commodity traders and investors must keep an eye on Silver price action.
