Silver Rates in Mumbai

• Supply and Demand

The balance between supply and demand is one of the major factors affecting the per kg silver price in Mumbai today. If supply does not meet the demand or if the demand does not meet the supply, the silver prices will fluctuate.

If the demand is more and the supply is not adequate, the prices get driven up. Conversely, the prices will start falling when the demand does not meet the supply. 

This is also why oftentimes the price rises during the festive season, as many prefer purchasing silver during this period, driving up the demand.

• Oil Prices

Another important factor affecting the silver rate in Mumbai today per 10 grams, or even a gram, is the oil prices. Why? Because mining silver requires a large quantity of oil.

Given this, the volatility of oil prices affects the silver price in Mumbai and across the country. This means that if the oil prices go up, the price of silver is likely to follow and vice versa.

• Gold Rate

Given that gold is a safe haven for investors across the country, it is unsurprising that it affects today’s silver price in Mumbai. If there is an increase in the demand for the yellow metal, the demand for the white metal also generally increases. As such, the rise of the silver price generally follows the rise of gold prices. 

• Policy and Guidelines

While the general public demand influences today’s silver rate in Mumbai and across India, the government also plays an essential role in it. This is because while central banks see and use yellow metal as a reserve, silver is used for transactions. 

As such, any changes in the policy or guidelines by the Reserve Bank of India affect the price of silver. For example, any changes in the import duty also influence the price of silver because silver gets imported into India.

• Inflation

While gold is a popular option that investors rely on as it offers a hedge against inflation, silver is equally popular. A reason for this popularity is that both yellow and white metals are more likely to retain purchasing power and minimise loss from a dip in currency value. 

Given this, during inflation, you are more likely to see a hike in the silver rate in Mumbai and throughout India.

• Dollar Fluctuations

Like gold, silver too is inversely affected by the changes in the US dollar. This means that when the dollar weakens, the price of silver goes up, and when it appreciates, the price goes down.

Given this, investors often track the fluctuations of the US dollar to anticipate the rise or drop of silver prices. This enables you to enter and exit the market at the ideal time and make the most of your finances.

• Interest Rates

Like USD, silver prices also have an inverse relation with the interest rate. A reason for this is that the investment is silver generally from a long-term perspective. Given this, when the interest rates go down, the silver price goes up and vice-versa.