Economic conditions are currently uncertain, and America’s economic direction cannot currently be justified. It will grow or go into recession; the trump tariffs have worsened the situation. This uncertainty could have led to safe-haven buying in silver. Further Geopolitical tension with Russia, Ukraine’s war having no near end, has increased the investors’ appetite for safe havens.
Silver futures today touched an all-time high of Rs. 1,05,107, showing a continuous 5-day gain with its 1-week return standing at 8.69 percent and this year’s return from January to June standing at 20.92 percent, outperforming the Equity market return as Nifty 50’s return for this year stands at only 5.62 percent.
Stocks Poised to Benefit and Sectors at Risk
India’s two listed companies, which are poised to benefit from this silver rise, are Hindustan Zinc and its parent company, Vedanta, which holds a 63.42 percent stake in the company.
Hindustan Zinc, over the past two decades, has rapidly scaled up its silver output, boosting production from just 35 metric tonnes in FY04 to 687 metric tonnes in FY25, which is a 20-fold increase. This growth has elevated the company from 23rd place in the global silver-producer rank in FY14 to 4th position by 2025.
Vedanta stands to benefit significantly from the rise in silver prices through its 63.42 percent stake in Hindustan Zinc, which is now one of the world’s 4th largest silver producer. As silver prices surge, Hindustan Zinc’s higher production volumes and higher silver price will enhance its revenue and profitability, which will directly boost Vedanta’s consolidated financial performance. The increased earnings from Hindustan Zinc could result in larger dividends and stronger cash flows for Vedanta.
Rising silver prices impact several sectors. Electronics and semiconductors face higher costs due to silver’s role in circuits. Solar energy sees increased panel production costs, while automotive faces pricier components, and healthcare devices become costlier due to silver’s antimicrobial use. Even imaging sectors using silver in X-rays can feel the pressure.
Silver’s dual role as an industrial metal and a precious metal investment asset makes it attractive but also volatile. If silver is trading near all-time highs while the world economy is slowing, investors should be alert to potential pullbacks or reversals. It’s essential to track key indicators like industrial output, inflation trends, interest rate policies, and global trade conditions to assess whether silver’s rally is sustainable or fragile.
Written By Abhishek Das
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