The Hindu Business Line : Silver hits all-time high of Rs 12,270

The local market tracked the steep rise in silver prices at the overseas market. The metal touched a nearly 17-year high of $8.33 per ounce during morning trade in London. The spurt was mainly due to speculative interest.

"Silver is going one way. Strong overseas market is driving the domestic market. There is no mismatch in demand-supply. Demand is extremely limited, while supply is steady," Mr Suresh Hundia, President of the Bombay Bullion Association (BBA), told Business Line.

Overall supply of silver through scrap in Mumbai was around 600-700 kg daily. Thus, local demand was fully met through scrap supply and Customs sale.

"Imports of silver during the last two months were virtually halted. Even banks have limited stock," said Mr Hundia.

A bullion dealer said: "There is no floating stock of silver in the market. A few banks have some stock (200-300 tonnes), but they are watching the market closely. Major stockists have also turned reserved as they feel the market may go up further in view of the strong overseas market."

Last month, the Customs Department in Mumbai sold about 14 tonnes of silver, according to sources.

There has been a steady demand for the white metal in the past three months mainly due to the marriage season. This demand is likely to continue until May-end.

However, the demand for gold and silver has always been price elastic.

"If the current rally continues, the country may turn silver exporter in place of importer. It is high time the Government considers export of gold and silver," said Mr Madhusudan Daga, a leading bullion analyst.

According to a rough estimate, the Centre is holding silver stock of about 3,000 tonnes.

On Friday, spot silver in London touched $8.32 an ounce at 12 p.m. GMT as funds continued to snap up the precious metal, taking it to another fresh near 17-year high for the second day running.

Silver quoted at a new peak of $8.20/8.23 per ounce by 8.27 a.m. GMT, up from New York's close on Thursday at $8.11/8.14, according to agencies.

The metal's next target on the upside is $8.50, a level last seen in October 1987.

Investors have increasingly sought to place their cash in silver, rather than gold, as a safe haven option, while silver's industrial role has also made it attractive on the hope of a pick-up in the global economy, according to agency reports.

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