RPT-India silver imports seen spiking in festival qtr

[SilverKing]

http://in.reuters.com/article/2011/10/21/india-silver-imports-idINL3E7LJ0GI20111021

RPT-India silver imports seen spiking in festival qtr

* Silver imports in Oct-Dec could jump 50 pct

* Present levels are good for investment, says analyst

* Importers uncomfortable with silver due to volatility

By Siddesh Mayenkar

MUMBAI, Oct 21 (Reuters) - India's fluctuating silver imports are likely to rise 50 percent year on year in October-December quarter as investors shy away from the expensive yellow metal.

India, the world's largest importer of silver, could import 250-300 tonnes of silver during the quarter, said Prithviraj Kothari, president of the Bombay Bullion Association. Gold imports are seen rising 30-40 percent.

"Silver prices are in a comfortable range and people are considering it as a buying opportunity," said Harshad Ajmera, proprietor with Kolkata-based wholesaler, JJ Gold House.

Spot silver traded above $30 an ounce, down 39 percent from its record high of $50 hit in late April, but still up nearly 30 percent from a year earlier.

Silver prices overseas have declined 37.7 percent since an April peak of over $49.51, as against gold's 13 percent gains, making analysts more optimistic on white metal for a long-term investment.

"If one were to take long-term view, even present levels are good for investment in silver. Demand is mostly from the physical side and it is natural because after it reached new highs this year, everybody's attention is on gold and silver," said Gnanasekar Thiagarajan, director with Commtrendz Research.

Thiagarajan sees support for silver at $28-29 an ounce and the price eventually rising towards $45 by year-end.

Silver prices are likely to follow bullish gold, which is likely to touch $2,000 an ounce, said Ong Yi Ling, an analyst at Phillip Futures in Singapore.

Kothari at the Bombay Bullion Association expects total silver imports in 2011 to surpass 4,000 tonnes. This despite a 30 percent on month fall in the imports in May this year.

In 2010, the country's silver imports more than doubled to 3,029 tonnes, data from Thomson Reuters GFMS showed. In 2009, shipments had dived to 1,285 tonnes from 5,048 tonnes a year earlier .

The reason for this fluctuation is the huge stocking and de-stocking undertaken by traders for whom the silver business is a fallback in case of adverse business sentiment in gold.
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[pmbug]

It will be interesting to watch how the increased demand for physical gold/silver impact the markets here in the USA. With major producers like China no longer selling their production, things are going to get tight.

 

[SilverKing]

It will be interesting to watch how the increased demand for physical gold/silver impact the markets here in the USA. With major producers like China no longer selling their production, things are going to get tight.

I just got off the Lemetropole Cafe site that Bill Murphy of GATA runs. One of the London traders was saying Silver is about to take off and go to 44 quickly.. They are right over there most of the time when a trader says it? We will see sure makes it fun if were not for how bad the world economy is getting..

 

[pmbug]

I see the potential when I look at the tightness of the physical market and the makeup of the COT reports. My only concern is the potential for disaster with the Euro throwing a wrench in the paper markets.

 

[SilverKing]

I see the potential when I look at the tightness of the physical market and the makeup of the COT reports. My only concern is the potential for disaster with the Euro throwing a wrench in the paper markets.

I agree this could make for a quick downturn again. When the paper markets get hammered many firms and persons get margin calls and have to sell whatever they can and gold and silver will get sold. Think about what you said though a wrench in the paper markets? If paper is not doing well you end up being forced to buy what is left = gold/silver.

Trillions in derivatives and printing paper fiat money, by every country around the globe. They keep patching over all the paper problems with more paper promises. Bond holders in Greece just got told they would get a 50% haircut on their investment now they will demand higher rates for the bonds of Spain, Portugal, Italy, Ireland etc. on and on until it hits the U.S.

Paper house of cards is coming down and as people scramble to get out of paper they will go to what is left standing Gold/Silver.

 

[pmbug]

...
Paper house of cards is coming down and as people scramble to get out of paper they will go to what is left standing Gold/Silver.

I see that as the big picture too, but my previous comment was geared to a short term view. In any event, I'll just keep stacking as is my wont.