Silver crosses Rs 3 lakh
The price of silver on the Indian futures market (MCX) has crossed the level of Rs 3 lakh per kg. Silver, which was hovering around just Rs 95-96 thousand per kg in the month of April, has now skyrocketed to Rs 3,00,532. This stormy rise in the market is not just the result of general demand, but the reason behind it is a new economic ‘war’ between the world’s two superpowers, America and Europe.
Money tripled in 9 months
If you had invested money in silver instead of shares or land in the last 9 months, everyone would have been surprised to see your profits today. Since April till now, silver has given returns of more than 200 percent to its investors. In stock market terms, this is a performance like that of a ‘multibagger’ stock.
The surprising thing is that in the month of January alone, the prices have increased by about 25 percent. Currently, silver has become the best performing asset in terms of investment, beating all other asset classes (such as property or shares).
threat of trade war
The main reason for this panic in the market is American President Donald Trump and his ambitious plans. Actually, Trump is trying hard to acquire Greenland. The European countries which opposed his plan are now Trump’s target. Trump has made it clear that he will impose heavy tariffs (import duties) on eight European countries including France, Germany and Britain.
It is reported that from February 1, 10% duty will be imposed on goods from these countries, which will increase to 25% by June. This step of America has scared investors. Whenever there is a trade war situation between two big countries, people consider it safe to withdraw money from currency or stock market and invest it in gold and silver, and this is what is happening right now.
America and Europe are face to face
The matter is not limited to America’s action alone. The European Union (EU) is also in no mood to sit silent. According to reports, French President Emmanuel Macron and other European leaders are preparing a retaliatory attack. Europe can use its most powerful weapon ‘Anti-Corrosion Instrument’ (ACI) against America. Under this, there is talk of imposing a retaliatory tax of about 93 billion euros ($108 billion) on American goods.
The direct impact of this tension is visible on the global market. In Singapore, spot gold rose 1.6% to $ 4,668 an ounce and silver crossed $ 93. Metals like platinum and palladium have also regained their shine.
No longer trust the dollar?
Market experts believe that the current geopolitical situation is ‘ideal’ for gold and silver. Capital.com analyst Kyle Rodda says that the Trump administration’s continuous attacks on America’s foreign policy and the Federal Reserve (US central bank) have weakened investors’ confidence in the dollar.
This is being called ‘debasement trade’ in the market, where investors are running away from government bonds and currencies due to rising debt and uncertainty over government policies. The arrest of the Venezuelan leader and the Greenland dispute have added fuel to the fire. If this tension does not subside, then the prices of precious metals may create new records in the coming days.