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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