Diwali 2011: Cheaper silver dominates festival sales
The commencement of the five-day Diwali festival in India, with the celebration of `Dhanteras' on Monday, witnessed the `precious metal' sales being largely dominated by silver bars and coins of small sizes.
Hit by inflation, most of the Indian consumers apparently preferred silver more than gold for the Diwali 2011 celebrations, and rather went in for the cheaper white metal to celebrate the occasion of Dhanteras - a day which is believed to be auspicious for purchasing precious metals.
With the prices of silver having fallen 28 percent from their April high, most consumers seemingly bought this cheaper metal, in the hope that the metal may see some gains in the future. Silver traded at slightly more than 53,000 rupees per kg on Monday, in comparison to the yellow metal being traded at 26,854 rupees per 10 grams.
According to an earlier statement by Prithviraj Kothari - who is the president of the Bombay Bullion Association -, it is quite likely that 250-300 tonnes of silver may be imported by India during the quarter; with traders stating that the imports of gold may increase by 30-40 percent in the same period.
Noting that the sales od silver have been higher than those of gold that that people are buying the cheaper metal for "investment purposes, Vikas Rawal - manager at Mumbai-based retailer U. T. Zaveri - said: "If we look at the gold and silver ratio, silver is more."
