Silver Rate in Surat

• Supply and Demand

Supply and demand are basic economic concepts that affect the price of any commodities, including the white metal. The general rule and effect of the concept is that when the demand is more than the supply, the price will increase and vice-versa. 

 

As such, when the demand for the white metal increases, the silver price in Surat and other cities will increase too. The reason for the rise in demand can be many – inflation, seasonal demands, festivities, and more.

 

Moreover, silver is a scarce metal and, as such, has a finite supply. Therefore, as time goes on, the price will gradually increase further. To put this in perspective, consider today’s silver price in Surat, which is comparatively higher than that of a few decades due to limited supply.

• Gold Prices

The fluctuation you see in the silver price in Surat today is a result of the white metal’s correlation with that of the yellow metal. A reason for the correlation is that both are precious metals and offer the same safety and liquidity during financial or economic crises.

 

However, gold is scarcer than silver and, therefore, costs more. Because of this, gold is the first metal that gets affected by the factors and, as such, the first to have a change in price. Since silver is a close second, it follows the trend of the gold price.

 

In simple terms, when the gold price goes up, the silver rate in Surat and other parts will go up too and vice-versa. In fact, many investors even track the gold price to forecast the trend of the silver price. 

 

However, remember that these prices may diverge from the normal trajectory, so you need to take a holistic consideration of other factors affecting the price.

• Inflation

Inflation is a constant economic factor that affects the price of commodities. However, when inflation goes higher than expected, the volatility of the currency is higher. This is because inflation results in currency devaluation, which causes money to lose its purchasing power.

 

As such, when the devaluation is more than expected, the prices of commodities will be higher than expected. This would result in a cash crunch on a personal level as well as on a larger scale. 

 

However, precious metals are commodities that remain unaffected by this devaluation and allow you to have the same purchasing power as before. To put this into perspective, here is an example – Today, what you can buy from ₹100 is far less than what you could a few decades ago. 

 

Conversely, what you can buy with 10 grams of silver today is more or less the same as that of a few decades ago. This is because as the price of commodities increased, the silver price in Surat and other areas increased too, allowing you to get more value from your investment.

 

Given this property of silver, more people have now started investing in silver as inflation is increasing. This results in increased demand and, thereby, increased prices.

• US Dollar 

The base currency for precious metals is USD, i.e., the US Dollar. Therefore, any changes in the power of the dollar results in a change in the price of silver. When the dollar is strong, buying silver would be expensive and, as such, push investors towards other avenues.

 

On the other hand, when the dollar is weak, buying silver would not be as expensive and, therefore, would attract more investors. This would inadvertently affect the demand for the metal and therefore cause a fluctuation in the silver price in Surat and other areas.

• Crude Oil Prices

Silver gets mined – a practice that would require other commodities such as crude oil. The cost of these commodities gets added to the cost of mining silver. As such, the price of silver will change with the price of crude oil.

 

If the crude oil prices go up, mining will become expensive, and therefore the silver price will increase. On the other hand, the silver price may see a dip as the crude oil prices go down. However, since silver prices get affected by numerous factors, you cannot base the trend on this factor alone.

• Taxes 

Silver gets imported into India and is, and is subject to numerous taxes that ultimately get added to the final price of silver. These taxes include import duty and other local taxes. Therefore, the price of silver is affected by any changes in these policies.

 

Moreover, the local taxes will differ for every state, further resulting in a price difference on a state level. As such, the silver price per kg today in Surat may not be the same as that of other cities like Lucknow, Chennai, or Mumbai.

• Interest Rates

Interest rates are another factor that affect the price of precious metals. This is because the price of these metals is inversely linked to those of interest-linked investments. This means that when the interest rates go up, investors are likely to keep investing in interest-linked instruments. As such, the supply of silver rises and demand drops. 

 

However, when the interest rates go down, the returns would go down too. This would result in investors being hesitant to invest in interest-linked options and turn to precious metals. 

 

This results in an increase in demand and, therefore, an increase in the silver rate in Surat and other parts of India. 

 

Now that you know the silver price today in Surat and the factors that affect it, be sure to invest with your finances and goals in mind. In addition, you need to ensure portfolio diversification to mitigate losses.

 

Portfolio diversification helps you leverage the gains of one investment class against the loss of another, thereby reducing, if not nullifying, your losses. Try to invest in debt, equity, fixed-income investments, and more. This way, you secure financial growth while minimising the risk.