Based on the assumption that the above economic factors are here to stay, i.e., a healthy demand, tight supply, a weakened rupee and the world general uncertainty, the Silver price value may increase by about 15 percent to 25 percent of the present price. In this case, a reasonable future price range within the coming one to two years would be in the range of 210000 to 240000 rupees per kilogram.
The causes of an upward trend.
- Long-term consumer need of photovoltaic, electronic and electric-vehicle industries.
- Long term shortage in the world supply.
Capital inflows Because silver is used by investors as a hedge against systemic risk.
- Endemic inflation and macro economic fluctuations.
How much can silver fall? (Downside risk)
Any change in market mood, or a profit-selling spurt, may lead to a fall in the near future of about 10 to 20 per cent, with a corresponding possible damage of between 170, 000 to 190, 000 rupees per kilogram.
Reasons for a downward move?
- Realization of profits after a big bang.
- Strengthening of the U.S dollar or increase in policy rates.
- Weakening manufacturing demand.
- Expansion of the economic recession.
Important note.
Silver is defined by the high level of price volatility. Movements may be rapid towards each other or away. A sensible approach that may be undertaken by individuals involved in this asset is to use capital in installment and not in a lump, expect a long horizons, and engage in scrupulous risk management.
