Demand higher for silver this festive season

CHENNAI: While the price of gold is on an upward swing, making it almost unaffordable for the middle-class, its much-poorer cousin silver has been garnering a lot of demand among the denizens, especially during this festival season.

Though jewellery coloured like gold (popularly known as imitation gold) has been in the market for ages, the new trend is gold-plated silver jewellery that’s picking up heat among customers in Chennai.

“With the wedding seasons expected, and destination weddings becoming common, gold-plated silver ornaments are a preferred choice,” says Jayantilal Challani, president, Jewellers and Diamond Traders Association of Madras.

Even in cases where people can't afford gold jewellery, they use silver as an alternative. Silver, as an investment, is beneficial for customers as the value doesn’t dip when the silverware is resold. “The price of a gram of silver, when compared to 2014, is 7-8 times higher now,” pointed out Challani.

“Even if the price is high now, it’s still less compared to gold. And, those who prefer silver jewellery continue to purchase them even if the rate increases,” said C Shankar, a goldsmith at Edappalayam in Sowcarpet.

Demand for silver items for religious reasons has also increased. Sridhar R, a consumer shares his experience of silver utensils being a part of their culture. “Silver utensils would be gifted to the groom during the wedding,” he recalled.

According to the World Silver Survey 2024 by the Silver Institute, India is expected to be the biggest contributor, in part as retailers begin restocking again. India’s silver demand has always been price-sensitive. So, the new highs in price last year and holding at higher levels (above Rs 70,000/kg) for several months encouraged investors to take profits while fresh investors had little opportunity for bargain-hunting except during September and October when the price corrected.

“Indian silverware fabrication demand in 2023 for silver was 8% higher than the average of the past decade. Much of this has to do with the improvement in purities driven by increased penetration of sterling silver. Focusing on 2023, gifting demand suffered due to elevated rupee prices. High prices also led to a reduction in overall product weights, with manufacturers pointing to a five to ten percent drop to help offset the impact of the price rise,” said the survey.

The research suggests that some consumers also shifted to items with less than 80% silver, especially in smaller towns and rural locations which are more price-sensitive. Furthermore, high-end silverware furniture and decorative pieces are gaining prominence among the upper middle class. As a result, several standalone silverware shops have opened in the last few years. This has also helped to partially offset the reduction in demand from rural India, added the survey.