Markets

Silver set to surge, expected to reach Rs.1.25 lakh per kg within 12-15 months

Report predicts silver may outperform gold amidst rising demand and positive market sentiment

October 26, 2024

Experts forecast a rise in silver prices

Silver is poised for significant growth, with projections suggesting it could reach Rs.1,25,000 per kg on the Multi Commodity Exchange (MCX) and $40 on COMEX within the next 12 to 15 months, according to a report released by Motilal Oswal Financial Services Ltd (MOFSL) on Saturday. This optimistic forecast indicates that silver may not only match but potentially outperform gold in the medium to long term.

The report highlights silver’s impressive performance this year, noting a remarkable gain of over 40% year-to-date, which has seen prices breach the Rs.100,000 mark in the domestic market. This surge is attributed to strong safe-haven buying, alongside robust industrial demand for the metal.

“Overall, the sentiment for this Diwali is projected to be positive, raising optimism for bullion,” said an MOFSL spokesperson. The report emphasizes that regardless of market fluctuations, gold has historically been a reliable store of value, particularly during times of uncertainty.

Investors who placed their bets on gold during Diwali 2019 have seen substantial returns, with an increase of 103% on their investments by this Diwali. Historical data indicates that the 30 days leading up to Diwali have only shown negative returns in two instances since 2011, specifically in 2015 and 2016.

While gold continues to be a solid investment, the report suggests that silver is gaining traction as a viable alternative. The bullish outlook for both precious metals is supported by two critical factors: expectations of rate cuts from the Federal Reserve and rising geopolitical tensions, particularly in the Middle East.

As the market prepares for the festive season, investors are advised to remain vigilant for potential buying opportunities. “We continue to believe that gold has further upside potential. Any dips in price could present significant accumulation zones,” the spokesperson added.

With the anticipated rise in silver prices, the coming months may see a shift in investor focus, as the metal emerges as a strong contender in the precious metals market. As Diwali approaches, market sentiment remains optimistic, setting the stage for potential gains in the bullion sector.

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