Silver prices likely to zoom

Hyderabad: Apprehending steep decline in the official trade volumes due to high import duty of 10 per cent, the apex trade body has appealed to Mrs Sonia Gandhi to intervene in the matter and fix the import duty at 2 per cent. In turn, it is learnt Mrs Gandhi has referred the matter to the Commerce Minister, Anand Sharma for consideration. A decision is likely to be taken soon after the return of the Commerce Minister who is at present on an official visit abroad.

And going by the recent decision of the central government to increase the number of subsidised domestic gas cylinder from 9 to 12 on the advice of Rahul Gandhi, an expectation is in the air that Mrs Sonia Gandhi’s advice will be taken seriously. Consequently, if the import duty on gold is reduced, it will result into an accelerated gold inflow which will increase the current account deficit. In fact, as the CAD attributable to gold-import had touched well over 5 per cent, the import-duty had been raised to the double digit level. Meanwhile, a clear trend has emerged in favour of silver.

The demand for silver and its jewellery has been on an increase, particularly owing to the changed preference from gold to silver by rural folks. Therefore, it would not be a surprise if in the coming few months the white metal price touches Rs 50,000 per kg mark from the current ruling price of around Rs 45,000.