New Delhi: The price of silver is expected to touch $60 per ounce within one year, representing a 20 per cent increase from current levels, a report said on Friday. The price surge will be driven by a supply-to-demand deficit of 20 per cent and rising industrial demand, according to the report from Emkay Wealth Management.
The firm forecasted that expected rate cuts in the US may lead to some decline in the dollar, further providing support to price growth in gold. Gold has outperformed other assets year to date, returning 61.82 per cent through October 8, compared to a 4.2 per cent gain for Indian equities (Nifty 500 TRI) and 8.4 per cent for bonds (Crisil Short Term Bond Index), the report said.
Ashish Ranawade, Head of Products, Emkay Wealth Management, identified increasing institutional and central bank preference for gold over the dollar as a key factor driving precious metal strength. “Demand-supply dynamics are favourable to bring upward mobility in silver prices and technically near a breakout zone for all-time prices,” Ranawade said.
The advisory firm said that Indian equity markets continue to be in the expensive zone relative to growth, with the PE ratio of Nifty 100 at 21.8 times, Nifty Midcap 150 at 33.6, Nifty Smallcap 250 at 30.43, and Nifty Microcap 250 at 28.88.
“Structurally, India is expected to be an outlier in the global economic landscape. A spate of IPOs has made India a much wider market than what the indices indicate. Stock-specific opportunities remain prevalent for Indian investors. We expect PMS and AIF and active fund managers should do well,” said Dr Joseph Thomas, Head of Research, Emkay Wealth Management.
A favourable monsoon and improved water reserves also point towards a stronger second half of the financial year, particularly during the festive and busy season, the firm noted.