Silver Streak

Yogi — Tue, 31 Mar 2009 05:42:00 GMT

Despite the gold prices rising since the beginning of the year, silver has outperformed the yellow metal. Its prices have risen by 24%, while those of gold peaked at over Rs 15,000, translating into a gain of only 14%. Investors have been lured by growth in bullion prices, particularly since the global recession has taken the shine out of stocks, real estate and bonds. As stocks have lost value, the trajectory for silver and gold prices has been similar. When gold prices go up, silver prices shape up accordingly, says Assocham secretary general D.S. Rawat.

Unlike gold, which has seen steady growth through 2008, silver prices saw a sharp drop from a peak of Rs 27,000 per kg in March 2008 and are just recovering, says Angel Commodities research head Amar Singh. iShares Silver Trust, the world's largest silver-backed exchange-traded fund, saw its holding rise by 153 tonnes in just four days this month.

Still, a recent report by Assocham expects the rally to last till August 2009, when prices are expected to peak at Rs 24,000. By January 2010, they are projected to slide to Rs 17,000. The reason is simple: by then, the financial meltdown is expected to stabilise, which will encourage investors to rebalance their investment plans for bullion and other asset clasees as well.

This article is sourced from Money Today for InvestmentYogi. The original author of this article is Tanvi Varma.

Investing It! : investment, investors, silver exchange traded fund

Silver Streak