Precious metals are often considered a safe investment during times of financial uncertainty. However, most people look to gold and platinum rather than other assets. Even so, demand for silver is soaring in Pakistan and India, with the rest of the world likely to follow.
Silver Demand In India & Pakistan
It has been an exciting month for fans of precious metals. Both gold and silver saw tremendous market performance recently. That is primarily due to the soaring silver demand in Pakistan and India. Investors in Pakistan are concerned over the weakening rupee – in USD terms – and want to focus on assets capable of retaining value. Unfortunately, Fiat currencies are a notoriously bad option for maintaining value or purchasing power.
Following the increasing silver demand in Pakistan – and higher appetite for gold – prices rose accordingly. Gold hit all-time highs in the countries, whereas silver prices increased significantly. Further price increases are expected to materialize in the coming weeks. Market analysts see no immediate change in the rupee/USD position and will continue to push for safer assets. Moreover, the country’s weak economic prospects will drive further demand for precious metals.
Similar things happen in India, although for different reasons. Soaring silver demand throughout 202 has turned the market on its head. So much even that traditional silver shipments by sea have been replaced by air cargo trips. Demand continues to rise, and suppliers struggle to keep up. As such, precious metals are being taken out of foreign vaults at a record pace to keep customers satisfied. New investment demand – primarily from poorer and younger Indians – will continue to ramp up.
Early estimates predicted India would impost roughly 5,900 tonnes of silver in 2022. A notable increase compared to the 4,500 tonnes in 2021. However, by late November, the country imported over 8,000 tonnes. Silver demand is on track to double that of 2021, which is remarkable. Interestingly, the West remains rather bearish on silver as there is no increased demand.
Record Levels Were Expected
The increasing demand for exposure to silver and gold isn’t entirely unexpected. The Silver Institute expected things to improve for silver. Moreover, it recently predicted the “biggest deficit” for the popular precious metal. Silver availability dwindles thanks to its applications in industry, jewelry, silverware, and investor demand. For instance, the amount of silver in vehicles continues to increase, and demand for solar panels has remained strong.
Moreover, the popular metal saw a value downturn due to the COVID-19 pandemic. That enables investors to buy up silver in bulk at discounted prices, although those lower values are nowhere to be found today. As silver demand rises, discounts will be much harder to find. That won’t deter manufacturers and investors from diversifying their portfolios, though.