Silver may fall further before finding a bottom, says Anmol Silver CEO

Silver prices could remain under pressure in the near term despite correcting about 25% from their highs this year, according to Kishore Roonwal, CEO of Anmol Silver. He expects the weakness to continue as higher US interest rates and geopolitical tensions weigh on investor sentiment, although lower prices are beginning to attract buyers ahead of the festive and wedding season.

Roonwal said he does not believe silver has reached its bottom yet. He expects physical demand to improve if prices remain at lower levels, while investors could return to bullion and coins as valuations become more attractive.

"The pattern in which it is falling looks more dangerous... I don't think this is the bottom line," Roonwal said. He added that if the current trend continues, silver could fall to ₹1.80-1.85 lakh in the physical market and ₹1.75-1.80 lakh on MCX.

According to Roonwal, rising US Federal Reserve interest rates, higher crude oil prices and geopolitical uncertainty have combined to keep pressure on precious metals.

He noted that silver has found some support near ₹1.92 lakh on MCX but said the recent rebound lacked strength, pointing out that prices gave up gains during the trading session.

Festive demand improving

Despite the weak price trend, Roonwal said lower prices have started bringing customers back to jewellery stores during the Diwali season.

"There is good footfall in the retail outlets now due to the rates. If the fall stays for a week, we will see a lot of buyers coming into the market," he said.

He expects investment demand for bullion and coins to pick up first, followed by purchases of silver jewellery, utensils and articles as the wedding season gathers pace.

Imports unlikely to drive prices

Roonwal also downplayed the impact of lower silver imports on prices. While imports have declined this year, he said recent government measures to ease import licences should improve supply.

"I don't think this will be the reason for the price hike," he said, adding that premiums in the domestic market remain normal.

On investment demand, Roonwal believes physical silver will continue to outperform other investment avenues during the festive season.

For the full interview, watch the accompanying video

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