According to a report by Reuters, silver is indicating less encouraging figures of growth for the Indian market. With prices falling down to 16,600 a kg, purchasing silver was on a high by merchants, but the same is not being supported with an increase in demand. The current demand is estimated to be around 20% of the regular demand value.
Although silver prices were higher by only 0.5% over November 2006, the sharp rise since August has affected demand. The month in which the Hindu festivals Dhanteras and Diwali are celebrated is when silver is in high demand. However, according to Bombay Bullion Association president Suresh Hundia “Demand has become zero. Last year between Navratri (September) to Labh Pacham (October), around 450 tonnes of silver may have been sold. This year, not even 50 tonnes may have been sold.”