Bullish on silver, advice is buy more

NEW DELHI: Silver has emerged as the best performing asset five years in a row.
While the Jasmine Revolution sweeping West Asia and parts of North Africa have added to the rising graph, silver, unlike gold, also has significant industrial use. It is, therefore, not surprising that higher economic activity in most parts of the world is driving demand for the metal.
The growth of green technology has added to the price pressure as demand for solar panels rises. By next year, silver usage in solar panels could reach 2000 tonnes, which is around 7% of the total output, Barclays Capital said in a research note issued last week.
So what should investors do? "I am not as bullish on silver. We are also advising investors to stay away from it. Based on long-term interest and the overall macro and geopolitical situation, as well as the improvement in the fundamentals, gold looks better," Barclays Capital's Yingxi Yu said over the phone from Singapore.
Domestic brokers are, however, more upbeat on the metal. Religare's Manglik says it makes sense to increase silver's share in the portfolio from around 10% to 15-20%. "Everything today is in favour of gold and silver going up. I would say the downside risk is Rs 5,000 (a kg), while the upside potential is Rs 10,000."
The downside risks arise from the fact that based on historical trends, the metal is over-valued.Despite the downside risks, Kunal Shah, head of commodities research at brokerage firm Nirmal Bang, says the peak is yet to be reached, which could come in the next three months.
(Source: http://timesofindia.indiatimes.com/business/india-business/Bullish-on-silver-advice-is-buy-more/articleshow/7559031.cms)