Know why it is wise to invest in silver now
There has been uncertainty in the market for some time now. Worries about the US-China trade war, US sanctions on Iran, rupee weakness etc. have kept the market volatile. In such situations, investors withdraw money from stocks and invest in precious metals. But, unlike gold, there has not been a significant increase in silver.
Manoj Kumar Jain, director, India Nivesh Commodities, says, “The market is treating silver only as an industrial commodity. It is not being treated as a precious metal. This is the reason for the fall in the white metal.”
Experts feel that the performance of silver may remain weak for some time now. “As long as there are fears of trade war and global economic slowdown, silver will outperform gold,” says Praveen Singh, AVP, Sharekhan Comtrade.
Keep these things in mind while buying silver, otherwise there will be loss
Despite the fear of underperformance in the short term, silver can be bet on in the long term. The gold-silver ratio is at a decades-high. This means that silver is at a lower price than the yellow metal.
More importantly, silver is trading at half the price from its highest level of Rs 75,020 per kg (2011 price). So it has a lot of potential to grow. This is the reason why investors have started looking at it again as a promising asset.
Hasmukh Bafna, president of the Wholesale Jewelery Welfare Association, says, “In the last 1-2 months, there has been an increase in interest in silver. The number of people buying silver bars has increased.”
Apart from low silver prices, there are many other reasons which are in favor of silver in the medium term. “Silver production is now declining due to lower prices,” says Singh of Sharekhan Comtrade. This is good for the next 2-3 years. Against the current $14.82 (Rs 1,061) an ounce, in 2019, silver is $17 (1,218). Rupee) per ounce.
Before investing money in silver, know that unlike
gold, silver is not available in paper form. Actually, there is no such thing as a silver ETF. Hence investors have no option but to buy it in physical form or from the futures market.
Also read: How Much Should I Invest In These Four Mutual Fund Schemes?
Silver bar or coin is the first option. Silver Bar is now available from 100g. This makes it easier for investors to buy and store it. In the past, retail investors have often shied away from buying silver bars. These were not available for less than a kilo. A lot of capital was needed to buy it. Also there was the hassle of maintenance.
Purity issues are also associated with buying physical silver. To eliminate purity concerns, investors should decide in advance with the jeweler that they will buy back the silver from them later. Even if jewelers are ready to buy back silver bars or coins, they often do not buy them at the price they sell. Thus, it is better to decide the terms of withdrawal well in advance.
All such problems can be overcome by buying silver from a commodity exchange like MCX. This is a better option than others.
Silver is bought in this form, more
commonly people buy silver utensils, silver jewelry or silver gods apart from silver coins.
Must see these 4 things before buying silver
Just as gold has hallmarking, so is silver. The Bureau of Indian Standards (BIS) does the hallmarking of silver. Here are four things, which should be kept in mind while buying silver.
-Grade of purity/
finance -Hallmarking center identification number or mark
-Jeweller identification number or mark
According to the best silver jewellers, 9999, 9995, 999 grade silver is considered the best. The utensils, coins made of this silver are considered the best. Whereas, 990 to 925 grade silver is considered the best for jewelry. To give strength to silver jewelry and utensils, some other metal is mixed in it. In such a situation, definitely ask the goldsmith which metal he has mixed.
check receipt carefully
Have a full receipt when you buy jewelry. In this, the complete details of the silver used in the jewelery and its price or charge are given. There is also a hallmarking charge. Usually it is Rs 25 per item in silver case. Apart from this, Rs 150 for each consignment, service tax and other charges are also added to the price of silver. At the same time, while buying silver jewelry, it must be kept in mind that the goldsmith is telling the price on face value.
Know the goldsmith’s policy to buy back silver
Often people sell their old jewelery to the goldsmith and either want money, or take other jewelery in exchange for it. Therefore, whenever you buy gold or silver, then also ask the goldsmith the rules for selling or changing it back. Many times people also get stones installed in silver jewelry. In such a situation, keep in mind that what is the rate of these stones.
Keep these things in mind while taking silver
Buy jewelry only from a certified retailer that sells Hallmark jewelry. For this the list can be seen from BIS.
Take a receipt while buying silver, so that you have proof of purchase.
If you are buying a silver coin, then the year of manufacture must be mentioned on it.