2017: The year silver trumps gold?

For centuries, gold has been a trusted means, if not the only means, of ensuring financial security in Indian homes. However, it now appears that as 2017 begins, gold will have to cede the popularity space to its less popular sibling, silver.

The rise of the U.S. dollar following Donald Trump’s victory and the demonetisation of ₹500 and ₹1,000 notes in India were bad news for gold prices. Economists describe that an inverse relationship exists between the dollar and gold prices. A dip in the dollar value leads to traders stocking up on gold, increasing the precious metal’s value. The fall in gold prices was also attributed to the aftermath of demonetisation, with Indian jewellers reporting a 30% fall in revenue.

According to the Khaleej Times, the price of gold could fall to as low as $950 per ounce if the U.S. economy continues to grow at 3% and the Federal Reserve hikes interest rates. Demand among Indian consumers is also expected to be lukewarm as the government could crack down on gold holdings given its popularity with black money holders. India and China are the largest importers of gold.

The Economic Times recently reported that silver prices have gained 16% in 2016, while gold gained only 9%. Experts feel the price of silver could rise around 15–20% in India given its growing popularity in the home décor and jewellery sectors as well as demand in the manufacturing of solar panels and electronics.

• Silver
• Gold
• Economy
• Precious Metals
• Finance