For the first time since 2011, international silver prices are above $40 per ounce, tracking renewed investor interest in precious metals, with the extended run sparking interest in shares of suppliers and clean energy companies.
Last month alone, silver prices surged over 10 percent, and the continued rally has rubbed off on the shares of Indian companies engaged in related businesses such as Hindustan Zinc, Vedanta and Goldiam International, anticipating earnings boost from a surge in industrial as well as investor demand.
Shares of Hindustan Zinc are higher by around 1.5 percent in trade after a 3.9 percent surge a day before, with Vedanta's shares too sharply off early lows.
In the past five trading session, shares of Goldiam International, a jewellery exporter, are higher by over 11 percent.
The rally in silver has followed the surge in gold prices, which topped $3,500 per ounce - a record high - on rising hopes of a rate cut by US Federal Reserve, and strong safe haven buying amid global uncertainties. So far this year, silver prices have soared more than 40 percent.
Lower borrowing cost in US is expected to benefit precious metals.
The recent, sharp weakness in Rupee, testing record low of 88/USD too is likely to benefit major exporters' earnings.
Fund flow into silver ETFs too have strengthened recently, with Nippon’s India silver ETF crossing Rs 10,000 crore AUM mark, tracking global momentum and domestic demand projections ahead of the festive season. Globally, silver ETF holdings have grown for a seventh consecutive month in August, the longest run since 2020.
One of key beneficiaries, Hindustan Zinc is the world's third largest silver producer with an output of 687 MT of silver in FY25, and a planned target to ramp up capacity to 1500 MT by 2030. The management sees silver prices staying buoyant in the coming quarters, with its precious metal portfolio contributing significantly to the overall profitability. Hindustan Zinc has also announced India’s first zinc tailings reprocessing plant at an investment of Rs 3,823 crore to recover high-value zinc and silver from discarded material.
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