How is Indian Silver Rate Determined

When it comes to precious metals, silver is one of the most widely purchased metals in India. The sentiments of the Indian customer with respect to this shiny metal has always been upbeat when it comes to investment, be it during the festive season or otherwise.

Right from jewellery to crockery to an array of other products, silver is a key element in the manufacturing of a number of commodities. In fact, given the local traditions that people in India follow, silver holds quite a prominent position, for it is an integral part of every other festivity or celebration such as feeding the new-born with a silver spoon, etc.

In this article, we tell you as to how the silver rate in India is determined and what are the factors that contribute to deciding the price of this metal each day.

How Is Trading in Silver Done in India?

In India, trading in silver pieces is done by the Multi Commodity Exchange (MCX), an independent body that is responsible for the trading of several other commodities as well.

Factors Affecting the Silver Rate in India

Silver has been a primary mode of investment for a lot of people since times immemorial. The Indian silver rate fluctuates quite frequently thereby giving a chance to people to earn lucrative returns through trading.

Here are some of the key factors that determine the silver rate in India. Take a look.

• Demand and Supply Factor

Of the many factors that affect the silver rate in India, the demand and supply factor is one of the key contributors to the price variation of the Indian silver rate. In fact, in any economy, demand and supply play a key role in deciding a commodity’s price.
For instance, due to the increase in demand for silver during the festive season, the silver rate in India subsequently rises up, thus forcing customers to shell a few extra bucks to purchase the metal.
On normal days, the silver rate in India is quite in the usual price range.

It may be pertinent to mention here that since India majorly imports its supply of silver, demand and supply can have a direct impact on the silver rate in India.

• Oil Prices

As you know, precious metals are to be mined from deep below the earth and as such, are found only in certain parts of the country. In addition, as aforementioned, since most of the silver is imported, it implies that a very strong logistical platform is required in bringing the silver from the place of mining or manufacture to the place of sale. The cost of transportation, in this regard, can be quite instrumental in deciding the silver rate in India. As such, oil prices or fuel prices also play a big role in influencing the silver rate in India and add to the cost of the precious metal.

• Inflation

You are well aware of the business cycle that function in any given economy. For instance, inflation denotes a rise in the price of commodities. As a result, it can significantly raise the silver rate in India, thus making people either defer their purchase or spend extra money to buy the same.

• Demand for Industries

Silver is used in a variety of commodities in India today. In fact, silver ornaments are coming back in trend in the light of designer embellishments that designers have begun to produce using this metal.
Not only this, silver occupies a prime position even in the world of crockery. This is because every person wishes to have his/her food using the best and sophisticated cutlery available.

The demand by manufacturing industries in India is surely putting pressure on the global markets with respect to the regular supply of silver.

This is another factor that can further affect the silver rate in India for purchase by the general public.

• Gold Rates

Gold and silver are two of the most widely bought precious metals by the Indian populace. In fact, both these metals complement each other in terms of price in the sense that if one becomes costly, the other follows suit.

Since the demand for gold and silver are more or less similar in India, the silver rate in India and the gold rate in India are equally affected by their demand and supply factors.

• Import Duties

Silver is imported in India in huge quantities. The silver rate in India is considerably affected by the import duties that the country levies and changes from time to time. A high import duty results in an increase in the silver rate in India.

Silver Rate in India

The silver rate in India fluctuates very often but remains more or less around the same denomination. For instance, these days, the silver rate in India is around Rs.41,000 per kilogram. Minor variations are a part of silver pricing.

Word of Caution

While buying silver, it is important that you know the current silver rate in India and how to recognise the correct form of silver. Silver is of two types- pure or fine silver and sterling silver.

While the former does not contain any other metal and is the truest form of the metal, the latter is combined with other metals such as copper or nickel so as to strengthen it and make it usable for customers.
Real silver is a tad expensive in comparison to sterling silver. While buying the metal, ensure that you buy only after verifying if your piece has the right hallmark and if you are being charged as per the purity of silver.
Do not fall for unscrupulous vendors for they can charge you extra even for a mixed version of the metal.

Final Note

Silver has been known to be one of the most precious and sophisticated metals to Indians and people all over the world.

Its sheen and lustre have always been influencing factors for those willing to purchase the metal. With a rise in the number of people who can now purchase silver in addition to the ever increasing demand of the metal by industrial units, the silver rate in India will only see a rise in the coming days.

If you too are looking for a lucrative investment, purchasing silver can be a good idea for it is a safer form of investment in comparison to investing in stocks or other such high-risk investment avenues.

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