A Beginner’s Guide to Silver Investment
Currently, even the silver prices have gone up, so how does one invest in the precious white metal? This is the question that is bothering most of the investors these days. So, before you invest in silver, you need to consider the pros and cons, and what are the best ways to add it to your portfolio, silver price movements and where it could be headed.
Silver price in India largely depends on its value of rupee against the dollar and also on the international prices. If the value of rupee falls against the dollar and international prices remain stable, then silver prices also get increased. At present, the silver rate in Mumbai for per gram/per kg is Rs. 47.76/ Rs. 47,763.
Why Invest in Silver?
Due to its metallic characteristics, silver is used considerably for ornamental, medical, and industrial, purposes. There are numerous reasons to invest or buy silver, and one of them is that it is affordable, it can be used as money, and it helps in saving money and is also a great form of investment.
You can easily invest in silver bullions and ornaments. In addition to the investment, silver is commonly used in industrial applications such as mobile phones, computers, solar panels, and so forth. No other metal has replaced silver so far.
In fact, global factors also do not have much effect on the silver price. India is one of the largest contributors to silver across the world. And fluctuations in the demand pattern of silver in India have an impact on international prices as well.
Moreover, the exchange rate also plays an important role in balancing the silver rates across India and globally. As the demand and supply usually remains high, it makes it one of the best investment assets.
Where Should you Invest in Silver?
There are a lot of options to put your money in silver just like equities. There are various forms of silver to invest your money. Some of them are given below:
- Silver Jewellery: In India Silver is quite auspicious and has been used as a traditional gift in marriages, and on various festivals. You can put your money in silver jewellery, utensils, etc. and keep them for future use as well, like for your children’s wedding, etc.
- Silver ETFs from Trading Accounts: ETFs are just like investing in mutual funds. Silver ETFs enable you to invest in securities from your trading account. Silver ETFs are a safe, cost-effective, and tax-efficient way of investing and also help in diversifying your investment portfolio.
- National Spot Exchange Limited (NSEL) - If you buy gold from NSEL you can e-trade silver and gold. This investment attracts tax incidence in case of gain. You can invest your funds in e-silver that too in smaller denominations and keep it in a Demat form.
Things You Need to Consider before Investing in Silver
- Research about the Silver MCX Price: Before investing your money it is important to do some research as well. Before investment, you need to look for the current silver price in the market. If you are in Mumbai you can check silver price in Mumbai. You can seek expert’s advice, check it online on our site, on news sites and analyze the price. This is will give you an idea when the silver price is low and you can make the purchase as per your budget.
Start with Small Initial investments: if you are a beginner and investing for the first time then it makes sense to start with small investments. You can also consider silver coins and bars in small quantities. Take into consideration the risk and the features of investing in silver. Once you get familiar with the silver market, you can make bigger purchases.
- Seek Financial Advice: In the beginning, it is always better to seek guidance from a financial advisor or an investment expert. They can help you understand the market and where to invest depending on the current market situations.
- E-Market: If you find it unsafe to keep silver at home then you can also invest in the silver commodity market. You can also open your account with a reliable trader, buy silver contracts online and sell it off on a profit before the expiry date.
What Makes Silver a Good Investment?
Silver is a good investment for people in Rural India as well. Both urban and rural buyers can benefit by investing in this precious metal. People who have limited knowledge of investment usually trust silver and gold as safe investment options. Here are some of the reasons why silver makes a sensible investment choice:
Silver is Easy on Pocket
It is quite easy to purchase silver from market dealers, banks, and bullion traders. And one of the biggest advantages of investing in silver is that it is quite affordable. You can buy 10 grams of silver at a price of about Rs. 470 only. It is the right option for those who do not want to put so much money in expensive metals like gold and are looking for more reliable and affordable options like silver. Therefore, you can invest in bullions, silver coins, ornaments, etc.
Jewelry and Ornaments
India dominates the global silver jewelry fabrication market with a total contribution of more than 30%. The silver market is evolving rapidly to cater to the increasing global demand. In India, the demand for cultural silver jewellery and designer silver ornaments will always be on a rise. And the industry is adapting to the new market from starting from India to the U.S.A. The market is constantly growing and it will be beneficial for investors to put their money in silver.
Increasing Global Demand
As per the experts, the demand for silver demand is increasing evidently in the Chinese and the Indian market. And India’s share is on top as compared to its other counterparts. There is ever-increasing demand in the global silver markets. But India continues to dominate the market because of its cultural connection. And the demand and supply of the precious metal will also keep growing that makes it a safe investment option for most investors.
Wide Industrial Use
You will be surprised to know that most of the routine products use silver - from electronics, batteries, phones, cars, jewelry, to silverware. Silver is used in every major industry in manufacturing different products like medical applications and solar panels.
Rightly said that silver is one of the most indispensable metals because of its constant demand in the industrial sector. Moreover, silver is thermally and electrically conductive, and reflective which adds to its usefulness in the making of industrial and medical applications.
Long Story Short
As you can see how significant is silver in manufacturing industrial applications. Therefore, its demand will also keep expanding. On the other hand, it’s one of the most popular metals for jewelry making and ornamentation. And its charm is never going to fade.
This year is quite strong for silver, though the prices are high but investors can consider silver ETFs in their portfolio. It is one of the most convenient and easiest methods of investing in silver.
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