Silver prices hit 7-week high of ₹72,600

Silver prices scaled a seven-week high of ₹72,600 per kg on Thursday, increasing 5.5% as the US dollar fell to a seven-week low after Federal Reserve officials adopted a less hawkish stance on interest rates. Gold prices too bounced back to ₹60,000 per 10 grams after a minor decrease on the previous day.
"As prices have surged there is hardly any demand for bullion in the market. Gold dealers are offering discounts on the yellow metal. The current rally in the precious metal is being driven by investment demand," said Prithviraj Kothari, MD, Riddisiddhi Bullion.

Domestic spot gold prices have been trading at a steep discount to the metal's bank rate over the fortnight as prices started increasing. To lure jewellers, gold dealers are offering $20 per ounce over official prices.

While gold prices have been increasing for several weeks, silver prices have not seen a similar trend.

"Silver prices have to match gold prices," said Gnanasekhar Thiagarajan, CEO, Commtrendz Research. "The appeal for silver will rise and in near term it can touch ₹74,500 per kg and there is possibility that silver may even trade at ₹80,000 per kg within a couple of months."

Hareesh V, head of commodities at Geojit Financial Services, however said the ongoing banking crisis is likely to support bullion in the near future but is unlikely to spur major rallies in silver as a weak global economy reduces the industrial demand. "Silver is largely used for industrial purposes nowadays," he said.

In the futures market, both gold and silver prices traded on the higher side on the MCX on Thursday, after witnessing mixed trends for two days.