2014 Outlook: Silver to outperform gold

Year 2013 was a roller-coaster ride for the commodities market. The glitter of gold and silver faded for the second straight year in 2013; though in the same year, gold, in the Indian market tested its peak as well. While gold prices fell by about three percent and its poorer cousin silver plummeted close to 24 percent this year.

In an exclusive interview with Reema Sharma of Zeebiz.com, Shiv Shrivastava, MD & CEO, IGuru Research, discusses the performance of silver as well as its outlook for 2014.


How do you see the performance of silver in 2013?

Silver, in line with gold, was a poor performer in 2013. It saw a high of USD 32 in February, but was unable to maintain its strength and dropped nearly 40 percent to USD 19.40 on Comex. MCX silver has followed the same pattern and inspite of a weaker Indian currency, it plunged from Rs 60000 to Rs 42000. Global economy slowdown has also affected demand from industrial sector.

How will Fed tapering impact silver prices in 2014?

USD 18 on Comex and Rs 36000 on MCX is a vital support for silver. Huge demand/buying can be expected from these levels as 2014 will be better on economic front. We have already seen the impact of Fed tapering on silver in 2013. No major downfall is expected in silver in 2014.

Also, please mention the performance of silver benchmark ETF.

Silver benchmark ETF was also a poor performer in 2013. 2014 will be better for silver benchmark ETF as participation in silver ETF is expected to be much better as compared to gold, since storage is a big issue with small investors.

Will silver prices correlate more with gold or base metals?

In spite of the fact that 70 percent silver demand comes from industrial sector, most of the times it moves with Gold.

US and European economy are now on the way of recovery; how will it affect silver fundamentals?

Better demand is expected in 2014 as silver has a wide range of usage ranging from medicines to electronic sector.

What range do you expect silver to trade by the end of 2014?

In view of better global economic scenario in 2014, it will touch USD 40 - USD 45 on Comex and Rs 60,000 - Rs 65,000 on MCX.