Is it a good idea to invest in silver in the commodity market?


#1

Is it a good idea to invest in silver in the commodity market?


#2

@Meera Commodity market is not everyone’s cup of tea since silver is traded in units of 1 kg and delivered in minimum lots of 30 kg. So invest in the commodity markets only when you know the nitty-gritty of the markets and how it functions. I would suggest if you are not an expert in the commodity market and still want to invest in silver then buy the physical metal from banks or your local jeweler.


#3

Hi Meera,

You will need knowledge and expertise to invest in the commodity market. It is best left to professional traders. If you want to invest, you can take the help of a broker. Silver being a precious metal, is a good investment just like gold. Here are the advantages.

Demand is Always Around

Silver being a precious metal is always in demand in the jewellery markets, especially in India. The demand is also being generated by industrial sectors that require silver for production and this demand far outweighs the demand by any other sector. This means that silver is something people need. What is in demand is worth investing in.

Supply vs Demand

While there is a large and ever growing demand for silver being led by nations like India and China, the fact is that the availability of silver is dropping as demands rise and supply reduces. This means that at some time in the future it will become tough to get silver and the price may go up given the limited supply thus putting long term investors in a very good position.

Timing the Markets

There are ways in which the silver markets can be predicted. Some of the most basic ways to time the market would be to wait for the wedding season or a festival to come around. The demand for both silver and gold goes up.

Cheaper than Gold

Silver is easier to acquire since it is cheaper than gold. Not everyone can hope to buy sizable quantities of gold but when it comes to silver, it can be bought in bigger quantities because it’s cheaper. For example Rs. 41,900 (price as of 6 September 2018. Subject to change) could buy you 1 kg of silver but the same amount will only get you only a bit over 10 grams of gold.

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