Silver surfers have a narrow escape as prices plummet

Some city-based bullion dealers had a narrow escape after the recent crash in silver which fell 30% since it hit a high of Rs 75,770 a kilo on April 25. The dealers booked silver through banks on a consignment basis or imported the metal directly to meet insatiable retail demand.

But, as prices plummeted, scores of investors lost their shirts, forcing some to renege on commitments to lift the metal. This left dealers staring at huge unsold inventory, which some said even threatened their financial solvency. However, luckily, the dealers had hedged themselves on local futures bourses by selling the silver they ordered.

The hedges effectively offset their losses in the spot market, and later they offloaded the silver on the futures market. Now, with their problems well behind them, some of them are said to be making their way to attend a religious function at a peer’s house in Rajasthan.

Contributed by Ram Sahgal & Reena Zachariah