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  • wolfman_jack_8830 wolfman_jack_8830 Nov 6, 2011 1:46 PM Flag

    Silver price: India to Break COMEX

    By Dominique de Kevelioc de Bailleul
    10/31/2011 3:13:32 PM

    As an ounce of gold reaches nearly five months of a typical Indian's income, consumers have moved to silver as a metal to gift or store wealth. Silver, on the other hand, is coveted, though not nearly as much as gold, can be purchased at a 50 to 1 rate for the same amount of money.

    Precious metals are to India as stocks are to Americans, though one can easily argue that India's lust for gold and silver is much stronger than American's propensity for stocks.

    So how do Indians cope with the high price of gold? Substitution. Silver.

    "Both metals were in demand, but since silver is cheaper, people preferred buying it," Rajiv Gupta of Nagal Jewellers in Sadar Bazaar told Economic Times.

    Jewelers also report Indian consumers buying more coins, more silver and less jewelry this year. Inflation in India reached double-digits rates in 2011, and the people can feel it in the cost of food, energy and housing, turning to precious metals as a store of wealth—in addition to the gifting tradition.

    "Coins, especially of silver, are much in demand as people are buying precious metals not only as gifts but also as an investment," said Sandeep Gupta of PP Jewellers.

    The number of tons of silver reaching the shores of India is soaring -- a grossly under-reported story in the precious metals community. Sure, the typical gold bug can cite WGC statistics for India, but what about silver's stealth advances in market share there?

    “India, the world's largest importer of silver, could import 250-300 tonnes (8.8 to 10.6 million ounces) of silver during the quarter, Prithviraj Kothari, president of the Bombay Bullion Association told Economic Times.

    Taking 250 tons of imports—just for the fourth quarter!—into better prospective, that rate of consumption—alone, without additional supplies coming on stream through mining activity or scrap, the COMEX would be wiped clean of its paltry supply of 31.1 million ounces (as of 9/28/2011) within 12 months. (One metric ton equals 35,274 ounces.)

    And it gets worse for the COMEX. The latest steep drop in the silver price from nearly $50 to $34 per ounce has generated more demand for the white metal among Western investors. But in India, the demand for silver could accelerate more, as the consumer there doesn't need a silver guru to tell them it's time to buy.

    Those watching CPI and PPI data releases from the US Commerce Department as well as the drama in Europe's slow-motion financial collapse should affix at the top of the list of silver investor knowledge the silver imports and monthly CPI data in India. There's where the action truly is.

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    • Not just India wanting Silver... White man in America is buying silver in a BIG WAY... I just drove by my JOKE OF A BANK and noticed what I thought would be the LOWEST EVER I WOULD SEE IN MY LIFE , INTEREST RATE ON MY MONEY....

      two months ago a 5 year CD gave you a rate of return of 1% .. Thats right .. Last time America saw that we were in a DEPRESSION...

      Now two months later the same bank dropped to just .5% for a 5 year CD.. Do you realize what this means.. Soon Toilet paper will be worth more then our WORTHLESS P.O.S DOLLAR..

      People Silver is gong to go through the frocking Roof one day... Not only is demand high but the Supply isnt keeping up with Demand...

      Watch as more demand and talks about silver will continue for many years to come... Thank the Short IDIOTS For keeping it down as long as they can . Once the lid comes off watch the Volcano BLOW...

      Buy Real Silver every month and be happy you did. If history proves anything is that our Currency will one day go BYE BYE.....

    • Informative post, thanks.

16.65+0.01(+0.06%)Oct 21 8:00 PMEDT