As gold continues to trade over 1600.00 per ounce and the economic crisis is still in full swing, US consumers have shift their interest from gold to silver. With less money to spend consumers are forced to be frugal and they have realized that they can get a lot more for their money when purchasing silver jewellery as opposed to gold.
Most jewellery purchased worldwide is not for investment purposes but simply for gifts and decoration and adornment. As gold prices skyrocketed and the economy tanked, many people turned to gold buyers to raise much needed cash and sold off their gold jewellery.
Silver appears to be the hottest precious metal on India’s export list at the moment.
Traders said jewellers’ exports to the US, one of the country’s major export destinations, have hit a new high.
For the month of March, when the gold jewellers in India were on strike for 21 days, silver exporters in India reportedly shipped jewellery worth $105 million as compared with $69 million in March 2011.
The high price of gold appears to have deterred many consumers in the US and across Europe from making any fresh purchases. This is proving to be a major boon for silver jewellery items, which are being picked up at major retail outlets.
Analysts are also bullish on the white metal.
Data from the Gems and Jewellery Export Promotion Council reveals that during 2011-12, silver jewellery exports grew to 44% compared with gold jewellery export growth of 30%. A new class of buyers has also emerged in the West, the council’s data showed with consumers eager to invest less than $100 for jewellery articles.
Silver exports for FY12 stood at $694 million as against $484 million in FY11.
Prithviraj Kothari, president of the Bombay Bullion Association said he was very bullish on silver and that the country could export more this year than last year.
[quote]From an investment point of view, if there are more jitters around as seen in Europe and the US, investors in both the regions would turn to park their funds in gold and silver. And jewellery articles are a big investment option these days.[/quote]
Jain added that the swing in global risk sentiment, the prevailing crisis in Eurozone, tension in the Middle East, especially in Iran, and movement of the dollar would be key factors to determine the price of the precious metals.
Khan added that the jump in sales was recently also quantified by a Nielsen/National Jeweller survey. The Silver Promotion Service of the Washington-based Silver Institute recently released the third of its annual surveys of silver jewellery sales with sales growing overall in 2011. Some 77% of surveyed jewellery retailers reported that their 2011 silver jewellery sales increased and 27% of those surveyed experienced an increase of more than 25%.
