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Investing in Silver in India

Silver is often called ‘the poor man’s gold’.

Historically, when the two commodities were money, gold was used for large exchanges and silver used for smaller exchanges.

But silver is not just a precious metal. It’s very widely used in industry. The white metal is used in all kinds of electronics, medical applications, dentistry, water purification, photovoltaic cells for solar energy, technical textiles, car batteries...and many other applications.

In many industrial applications, it doesn’t have a substitute. In fact, the IEEE considers silver to be a electrically critical element.

Silver tends to be sensitive to interest rates, inflation, and energy prices, just like gold, though the sensitivity may vary.

Industrial activity, demand-supply forces worldwide, the movement of the rupee against the dollar, mining supply, and inflation are some of the price determining factors.

Silver tends to play ‘follow the leader’ behind gold with a small lag.

When it comes to investing in silver, Indian investors had the only option of buying in physical form earlier. But now with the launch of silver ETFs on the exchanges, investors can hold silver electronically.

When buying silver in the form of bars and coins, investors should take extra care to check for purity.

Read more about how to invest in silver in India.

Also check out Equitymaster’s YouTube playlist on when and how to buy silver.


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