MCX Silver: Why Motilal Oswal sees the possibility of huge price hike

It expects to trade on MCX Silver 80,000/kg in the next 12-15 months. “Volatility may bring the prices to a low of Rs 60,000, followed by Rs. 58,000 too, while immediate resistance lies at 65,500 and a sustained break above it can take the price towards Rs 67,500. MoFSL believes that any such fall should be a good opportunity to accumulate Rs. 80,000 after 72,250 in the next 12-15 months,” the brokerage said in a note.

According to Motilal Oswal, in the short term, the Fed’s policy decisions and volatility in yield and dollar may weigh on prices, however rising inflationary pressures, geopolitical uncertainties, a push in the overall safe haven appeal are helpful for the silver price. Maybe.

Investors now have an option to invest in Silver ETFs (recently launched), which believe that rising demand could also be a contributing factor to the metal’s prices. Currently, there are few companies that have launched Silver ETFs and some other fund houses have applied for it, awaiting the approval of the market regulator SEBI.

The shift towards solar power is another important factor that could support silver prices. Good buying from investment and industrial sectors helped silver demand exceed 1 billion ounces for the first time since 2015. While some of that increased demand has been offset by a 6% increase in mine supply.

“Overall, silver’s dual gains i.e. push from uncertainties and inflationary pressures and increase in industrial demand is supportive of metal prices. Looking at the gold/silver ratio and the gold trail, some consolidation for the short term. Or pressure could be possible, although it could be an opportunity to add the metal to the portfolio with the expectation of a big jump in prices.”