There are clear and solid global reasons behind the strong recovery seen in the gold and silver markets. China has recently implemented new export-licensing rules on silver, due to which global supply has visibly tightened.
Its direct impact is visible on international prices. On the other hand, central banks are continuously buying gold and due to geopolitical uncertainty, safe-haven demand also remains strong.
India is already one of the largest silver buyers in the world, and in such a situation the risk of heavy dependency on China has now come to the fore. Supply side pressure, low global inventories and demand remaining consistently high are making the market tight.
On top of that, due to slow shipments, short-term availability may become more constrained.
Considering all these factors, there may remain upward pressure on gold and silver prices in the coming times. For investors, this is not just a price movement, but a reality check that the strategic importance of precious metals has now increased more than ever.
