Silver At Crossroads, India Imports Down 24% .

Silver is fast approaching the psychological mark of $50, doubling its pace in 2011 as the year producing one influential major events after another.

Precious metals including silver and gold have become an expression of the instability seen across the world from Japan to US and particularly in the Middle East and North Africa regions.

Both silver and gold cannot ask for a more bullish scenario given the geopolitical uncertainty and risk in the world today.

Higher oil prices also strongly supporting the precious metals and leading to safe haven demand. So too is the deteriorating nuclear contamination situation in Japan.

However, traders and investors are always worried about the eminent selling point which seems $45 at the moment.

It’s a fact that any steep climb must be followed by a sharp descent and that worries investors as usual. They also become more nervous as prices climbing and wonder how those events will play out.

Silver for May delivery was trading at $37.198 an ounce at the end of trading in New York on Wednesday.

Is silver near a temporary resting place after running tirelessly towards that coveted $50 mark ever since 2011? It seems, according to some analysts.

They said silver demand is highly based on India and China as silver jewellery were used widely in these two countries than anywhere else in the world.

Though silver is also used widely as an industrial metal, it’s the jewelery demand that driving the prices like that of gold, analysts said.

Any changes in India’s and China’s consumption might influence silver prices, they added. Rocketing prices could be the reason for projected dips in India’s silver imports this fiscal.

India’s silver imports till February this fiscal is 343 tons compared with 451.5 tons during the same period last fiscal.

India along with China are two of the world’s largest silver users as well. India's silver demand averages 2,500 tons per year and also produces 206.95 tons a year.

Just like rising imports by India supporting global prices, less imports will help cool prices, analysts added. India, world's largest consumer of the white metal had imported 1,000 tones of silver.

Despite the fact that there is no organized compilation of silver imports and consumption trends in India, high prices are the only reason for decline in India’s imports as prices has risen 24% in one month in the country.

Gold and silver remain fringe investments owned a tiny percentage of investors and savers in the western world. But prices are controlled by demands and india and china are still driving that.

Source : commodityonline.com