Given the present geopolitical tensions, the announcement by Russia’s central bank that it intends to buy silver to add to its reserves might have a big effect on the price of silver globally. This move represents a departure from central banks’ customary emphasis on holding gold reserves and could have a significant impact on the world market for precious metals and silver-dependent sectors.
Real Also: Have you invested? In July, 15 new mutual funds raised approx Rs 16,600 Cr. Look at division
List Of Mutual Fund whose performance depending upon silver
Mutual funds that depend on the price of silver include silver ETFs and mutual funds that invest in silver ETFs:
- Silver ETFsThese funds track the price of silver and invest in physical silver and related instruments. Some examples of silver ETFs include:
- Aditya Birla Sun Life Silver ETF: An open-ended ETF that aims to generate returns that match the performance of physical silver in domestic prices
- SBI Silver ETF: A fund that allocates at least 95% of its assets to silver and silver-related instruments
- Mutual funds that invest in silver ETFsThese funds invest in silver ETFs as the underlying security. Some examples of silver ETF funds include:
- Kotak Silver ETF Fund of Fund
- UTI Silver ETF Fund of Fund
- Aditya Birla Sun Life Silver ETF FOF
- Motilal Oswal Gold and Silver ETFs Fund of Funds
- ICICI Prudential Silver ETF FoF Direct Growth
The Russian Central Bank Declares It Will Buy Silver
Gold was the main asset maintained in reserves by central banks for many years. But Russia’s decision to add palladium, platinum, and silver to its holdings shows a shift in approach. Considering that Russia is one of the biggest producers of these metals worldwide, this change is especially significant. This announcement’s timing is significant since it coincides with increased global unpredictability brought on by continuous conflicts and economic difficulties. The State Fund will continue to add gold, platinum, and palladium to its holdings, and now, for the first time, silver as well, according to Russia’s Draft Federal Budget for the next year. With 38.5 million ounces produced last year, Russia was the eighth-largest producer of silver worldwide.
This Can also impact on BRICS Cryptocurrency, Russian Dollor ,Chinese yen & Indian Rupees. Today’s (21 OCT 2024) Latest news is that BRICKS will use its crypto currency for transaction
The choice to purchase silver for reserves may be a calculated move to take use of Russia’s natural resources and strengthen its economic position, even if the country’s production of silver is not as important to its economy as that of gold, platinum, and palladium.
How Does It Affect Bhartiya Companies?
The impact might be significant for Indian (Bhariya) manufacturing firms, particularly those in industries that rely significantly on silver, such electronics, solar panels, and medical devices. A significant increase in the price of silver would probably result in higher manufacturing expenses, which could reduce profit margins if they can’t be passed on to customers. Due to its exceptional conductivity, silver is an essential component of many electronic gadgets, which may provide difficulties for Indian electronics producers in particular.
Cost increases for the solar panel industry, which employs silver in photovoltaic cells, might also delay the uptake of solar energy at a time when several nations, like India, are promoting the expansion of renewable energy. Higher input costs may also be experienced by medical device producers who use silver’s antibacterial qualities in a variety of goods.
This may have an impact on how affordable some medical supplies, which could affect the availability of healthcare. However, a number of variables would determine the effect on Indian enterprises’ profit margins.
These include their capacity to bargain for supplier agreements, put cost-cutting strategies into place, or pass on higher expenses to clients.
Businesses that can swiftly adjust their manufacturing processes or have superior hedging techniques may be in a better position to keep their profit margins stable. Conversely, increased prices might help Indian silver mining firms or those with sizable silver reserves, which could somewhat balance the detrimental effects on the manufacturing sector.
What Effect Does It Have on World Silver Prices?
It’s a challenging phase for all the companies dependent of silver for manufacturing products. Because of these circumstances there could be a significant effect on the price of silver globally.
If we look at data, since 2010-2011, silver prices have lagged behind those of gold and palladium. Within the following two years, silver prices may rise significantly as a result of Russia’s action, possibly by 55% or more. An growth of this kind would impact many different businesses and economies around the world.