Over the last year there has been a dramatic surge in silver prices and in early April the industry was left reeling with a tsunamilike wave that sent prices soaring to a record ’31 year high’. Though there has been a marginal decline since then, and analysts point out that in real terms even the highest points reached are nowhere near the peaks of the 1980s, the sustained price surges and continued volatility that has become an integral part of the gold market seems to have now firmly imprinted its stamp on silver as well. %% It was not always so. When we compare silver and gold prices for a period of 60 years, there was very little, if any, net investment in silver. Post the crisis of 2008, and skyrocketing gold prices, that changed. And the subsequent rebirth of silver as an investment asset came almost as a shock to many who had worked with the metal for years. %% Gold has been seen as the traditional investment option, but a look at some recent statistics reveals that in during the past five years, ROI on gold was 140 per cent, while ROI on silver was over 250 per cent! (See Table). %% And there are analysts who believe that in the future, the ‘poor man’s gold’ may well transform itself into the ‘new’ gold, given the fact that large amounts of silver are consumed for industrial purposes (See Box on Page 47) each year unlike gold where 98 per cent of gold ever produced still remains above ground. %% {{New Strategies}}%% In this emerging scenario, silver manufacturers and retailers are adapting new strategies – from safety first measures to innovation in design and manufacture – to cope. %% Chennai-based Nithin Sukra of Sukra Jewellery, one of the very large silverware showrooms in India, has taken to replenishing his stocks of silver on a daily basis. “We buy as much as we have sold each day,” he says, thus guarding against any negative impact of sudden price fluctuations. %% The sheer affordability of silver is what has made it popular, he opines, elaborating, “If an average man has Rs. 3,000 to invest, he can easily pick a small silver ornament. Yet such an amount wouldn’t even warrant him entering a gold showroom.” %%

Also customers are attracted by the wide variety of designs and colours offered – there is copper silver, black silver, etc -- and the trendy lightweight jewellery that makes for perfect daily wear adornment. These are the key facets that jewellers need to pay attention to, he believes, because prices will not remain so favourable in the future. %% In his opinion, with industrial demand for the metal being unaffected by the price swings, and major mines in Peru and Mexico likely to exhaust themselves soon, present price levels are in fact attractive to investors. “In another three years, silver is going to be way beyond where it is today,” he adds. In terms of real long-term investment, Sukra opines that silver, not gold, is the metal to buy. By 2018, he believes that silver will scales highs of Rs 5 to 6 lacs per kilo. %% “Value addition through design and innovation holds the key to retaining customer loyalty,” says Abhishek Haritwal (of Haritsons and Symetree). “This could take many forms,” he added, “such as curtailing manufacturing costs and promoting use of multi-metal ornaments. We have also begun to look at restructuring our products and creating more lightweight pieces to protect customers against these shockingly high prices.” %% In his opinion, hedging is “too juvenile”, and the price rise earlier this year was not reflective of real demand, but driven largely by a huge consortium of investors who own stocks in silver mines. %% Rishi Rathi of Rathi Silver offered a different perspective. The current volatile situation is too unpredictable and retailers should keep business at a minimum till prices correct themselves further. %% Tarang Arora of Amrapali Jewels too sees the emerging market conditions driving changes in designs and manufacturing strategies. “There will be an increased use of gemstones in silver jewellery,” he says, “and greater alloying of silver in objects d’art. We will also have to look at alternative designs.” %%

Arora, in fact, stresses that there must be a wide exploration on the design front, and jewellers should not limit themselves to existing sources of inspiration. %% This is the right time to encourage people to invest in silver, he feels, for the writing on the wall is clear – there is volatility for now, but long term gains are assured. %% Naturally, while these definitely demand silver, silver jewellery demand may find itself diluted further in alloying, and just like the concept of 2 gram and 1 gram gold jewelllery came along, the day may dawn on silver jewellery, sooner than anticipated. %%

{{Strong Demand}}%% Total fabrication demand of silver in 2010 was up by 12.8 per cent to 878.8 Moz. Industrial offtake rebounded by 20.7 per cent to 487.4 MoZ a fraction shy of the pre-crisis record in 2008. In the sphere of jewellery and silverware demand rose by 5.1 per cent to 167.0 Moz, its first increase of substance in this segment since 2003 driven by the rising consumer spending in emerging countries, the gradual revival of consumption in industrialised countries, and the substitution effect due to the phenomenal rise in gold prices.%% Taking a longer term perspective, it can be seen that there are a large number of industries that use silver on a regular basis, and will continue, no matter what the costs are. %% {{Industrial Use:}} This will maintain itself, for while silver jewellery is aesthetics, industrial and fabrication needs are pragmatic. %% {{Electronics }}- This area has witnessed an explosive demand in PDAs, cell phones and MP3 players. Further, environmental concerns called for leadfree solders, pushing the demand for silver. %% {{Automobiles}} - Europe and England demand persists, but Japan is not likely to be manufacturing for some time, so there may be a surplus which would be balanced by increased European production. %% {{Medicine }}- Antiseptics use silver, and exponentially rising healthcare services will keep absorbing the production in greater quantities. %% {{Emergent Economies and Energy Resources: }}There is an increased interest in silver, especially by the Dragon. There is also a marked increase in use of non -conventional energy resources like solar power, which use silver components. This trend is likely to increase globally and affect silver demand. %% All the above mentioned areas demand silver on a regular basis, and will continue, no matter what the costs are.

{{“If an average man has Rs. 3,000 to invest, he can easily pick a small silver ornament. Yet such an amount wouldn’t even warrant him entering a gold showroom.” - Nitin Sukra}}

{{“We have also begun to look at restructuring our products and creating more lightweight pieces to protect customers against these shockingly high prices.” - Abhishek Haritwal}}

{{“There must be a wide exploration on the design front, and jewellers should not limit themselves to existing sources of inspiration.” - Tarang Arora}}

Over the last year there has been a dramatic surge in silver prices and in early April the industry was left reeling with a tsunamilike wave that sent prices soaring to a record ’31 year high’. Though there has been a marginal decline since then, and analysts point out that in real terms even the highest points reached are nowhere near the peaks of the 1980s, the sustained price surges and continued volatility that has become an integral part of the gold market seems to have now firmly imprinted its stamp on silver as well. %% It was not always so. When we compare silver and gold prices for a period of 60 years, there was very little, if any, net investment in silver. Post the crisis of 2008, and skyrocketing gold prices, that changed. And the subsequent rebirth of silver as an investment asset came almost as a shock to many who had worked with the metal for years. %% Gold has been seen as the traditional investment option, but a look at some recent statistics reveals that in during the past five years, ROI on gold was 140 per cent, while ROI on silver was over 250 per cent! (See Table). %% And there are analysts who believe that in the future, the ‘poor man’s gold’ may well transform itself into the ‘new’ gold, given the fact that large amounts of silver are consumed for industrial purposes (See Box on Page 47) each year unlike gold where 98 per cent of gold ever produced still remains above ground. %% {{New Strategies}}%% In this emerging scenario, silver manufacturers and retailers are adapting new strategies – from safety first measures to innovation in design and manufacture – to cope. %% Chennai-based Nithin Sukra of Sukra Jewellery, one of the very large silverware showrooms in India, has taken to replenishing his stocks of silver on a daily basis. “We buy as much as we have sold each day,” he says, thus guarding against any negative impact of sudden price fluctuations. %% The sheer affordability of silver is what has made it popular, he opines, elaborating, “If an average man has Rs. 3,000 to invest, he can easily pick a small silver ornament. Yet such an amount wouldn’t even warrant him entering a gold showroom.” %%

Also customers are attracted by the wide variety of designs and colours offered – there is copper silver, black silver, etc -- and the trendy lightweight jewellery that makes for perfect daily wear adornment. These are the key facets that jewellers need to pay attention to, he believes, because prices will not remain so favourable in the future. %% In his opinion, with industrial demand for the metal being unaffected by the price swings, and major mines in Peru and Mexico likely to exhaust themselves soon, present price levels are in fact attractive to investors. “In another three years, silver is going to be way beyond where it is today,” he adds. In terms of real long-term investment, Sukra opines that silver, not gold, is the metal to buy. By 2018, he believes that silver will scales highs of Rs 5 to 6 lacs per kilo. %% “Value addition through design and innovation holds the key to retaining customer loyalty,” says Abhishek Haritwal (of Haritsons and Symetree). “This could take many forms,” he added, “such as curtailing manufacturing costs and promoting use of multi-metal ornaments. We have also begun to look at restructuring our products and creating more lightweight pieces to protect customers against these shockingly high prices.” %% In his opinion, hedging is “too juvenile”, and the price rise earlier this year was not reflective of real demand, but driven largely by a huge consortium of investors who own stocks in silver mines. %% Rishi Rathi of Rathi Silver offered a different perspective. The current volatile situation is too unpredictable and retailers should keep business at a minimum till prices correct themselves further. %% Tarang Arora of Amrapali Jewels too sees the emerging market conditions driving changes in designs and manufacturing strategies. “There will be an increased use of gemstones in silver jewellery,” he says, “and greater alloying of silver in objects d’art. We will also have to look at alternative designs.” %%

Arora, in fact, stresses that there must be a wide exploration on the design front, and jewellers should not limit themselves to existing sources of inspiration. %% This is the right time to encourage people to invest in silver, he feels, for the writing on the wall is clear – there is volatility for now, but long term gains are assured. %% Naturally, while these definitely demand silver, silver jewellery demand may find itself diluted further in alloying, and just like the concept of 2 gram and 1 gram gold jewelllery came along, the day may dawn on silver jewellery, sooner than anticipated. %%

{{Strong Demand}}%% Total fabrication demand of silver in 2010 was up by 12.8 per cent to 878.8 Moz. Industrial offtake rebounded by 20.7 per cent to 487.4 MoZ a fraction shy of the pre-crisis record in 2008. In the sphere of jewellery and silverware demand rose by 5.1 per cent to 167.0 Moz, its first increase of substance in this segment since 2003 driven by the rising consumer spending in emerging countries, the gradual revival of consumption in industrialised countries, and the substitution effect due to the phenomenal rise in gold prices.%% Taking a longer term perspective, it can be seen that there are a large number of industries that use silver on a regular basis, and will continue, no matter what the costs are. %% {{Industrial Use:}} This will maintain itself, for while silver jewellery is aesthetics, industrial and fabrication needs are pragmatic. %% {{Electronics }}- This area has witnessed an explosive demand in PDAs, cell phones and MP3 players. Further, environmental concerns called for leadfree solders, pushing the demand for silver. %% {{Automobiles}} - Europe and England demand persists, but Japan is not likely to be manufacturing for some time, so there may be a surplus which would be balanced by increased European production. %% {{Medicine }}- Antiseptics use silver, and exponentially rising healthcare services will keep absorbing the production in greater quantities. %% {{Emergent Economies and Energy Resources: }}There is an increased interest in silver, especially by the Dragon. There is also a marked increase in use of non -conventional energy resources like solar power, which use silver components. This trend is likely to increase globally and affect silver demand. %% All the above mentioned areas demand silver on a regular basis, and will continue, no matter what the costs are.

{{“If an average man has Rs. 3,000 to invest, he can easily pick a small silver ornament. Yet such an amount wouldn’t even warrant him entering a gold showroom.” - Nitin Sukra}}

{{“We have also begun to look at restructuring our products and creating more lightweight pieces to protect customers against these shockingly high prices.” - Abhishek Haritwal}}

{{“There must be a wide exploration on the design front, and jewellers should not limit themselves to existing sources of inspiration.” - Tarang Arora}}

Over the last year there has been a dramatic surge in silver prices and in early April the industry was left reeling with a tsunamilike wave that sent prices soaring to a record ’31 year high’. Though there has been a marginal decline since then, and analysts point out that in real terms even the highest points reached are nowhere near the peaks of the 1980s, the sustained price surges and continued volatility that has become an integral part of the gold market seems to have now firmly imprinted its stamp on silver as well. %% It was not always so. When we compare silver and gold prices for a period of 60 years, there was very little, if any, net investment in silver. Post the crisis of 2008, and skyrocketing gold prices, that changed. And the subsequent rebirth of silver as an investment asset came almost as a shock to many who had worked with the metal for years. %% Gold has been seen as the traditional investment option, but a look at some recent statistics reveals that in during the past five years, ROI on gold was 140 per cent, while ROI on silver was over 250 per cent! (See Table). %% And there are analysts who believe that in the future, the ‘poor man’s gold’ may well transform itself into the ‘new’ gold, given the fact that large amounts of silver are consumed for industrial purposes (See Box on Page 47) each year unlike gold where 98 per cent of gold ever produced still remains above ground. %% {{New Strategies}}%% In this emerging scenario, silver manufacturers and retailers are adapting new strategies – from safety first measures to innovation in design and manufacture – to cope. %% Chennai-based Nithin Sukra of Sukra Jewellery, one of the very large silverware showrooms in India, has taken to replenishing his stocks of silver on a daily basis. “We buy as much as we have sold each day,” he says, thus guarding against any negative impact of sudden price fluctuations. %% The sheer affordability of silver is what has made it popular, he opines, elaborating, “If an average man has Rs. 3,000 to invest, he can easily pick a small silver ornament. Yet such an amount wouldn’t even warrant him entering a gold showroom.” %%

Also customers are attracted by the wide variety of designs and colours offered – there is copper silver, black silver, etc -- and the trendy lightweight jewellery that makes for perfect daily wear adornment. These are the key facets that jewellers need to pay attention to, he believes, because prices will not remain so favourable in the future. %% In his opinion, with industrial demand for the metal being unaffected by the price swings, and major mines in Peru and Mexico likely to exhaust themselves soon, present price levels are in fact attractive to investors. “In another three years, silver is going to be way beyond where it is today,” he adds. In terms of real long-term investment, Sukra opines that silver, not gold, is the metal to buy. By 2018, he believes that silver will scales highs of Rs 5 to 6 lacs per kilo. %% “Value addition through design and innovation holds the key to retaining customer loyalty,” says Abhishek Haritwal (of Haritsons and Symetree). “This could take many forms,” he added, “such as curtailing manufacturing costs and promoting use of multi-metal ornaments. We have also begun to look at restructuring our products and creating more lightweight pieces to protect customers against these shockingly high prices.” %% In his opinion, hedging is “too juvenile”, and the price rise earlier this year was not reflective of real demand, but driven largely by a huge consortium of investors who own stocks in silver mines. %% Rishi Rathi of Rathi Silver offered a different perspective. The current volatile situation is too unpredictable and retailers should keep business at a minimum till prices correct themselves further. %% Tarang Arora of Amrapali Jewels too sees the emerging market conditions driving changes in designs and manufacturing strategies. “There will be an increased use of gemstones in silver jewellery,” he says, “and greater alloying of silver in objects d’art. We will also have to look at alternative designs.” %%

Arora, in fact, stresses that there must be a wide exploration on the design front, and jewellers should not limit themselves to existing sources of inspiration. %% This is the right time to encourage people to invest in silver, he feels, for the writing on the wall is clear – there is volatility for now, but long term gains are assured. %% Naturally, while these definitely demand silver, silver jewellery demand may find itself diluted further in alloying, and just like the concept of 2 gram and 1 gram gold jewelllery came along, the day may dawn on silver jewellery, sooner than anticipated. %%

{{Strong Demand}}%% Total fabrication demand of silver in 2010 was up by 12.8 per cent to 878.8 Moz. Industrial offtake rebounded by 20.7 per cent to 487.4 MoZ a fraction shy of the pre-crisis record in 2008. In the sphere of jewellery and silverware demand rose by 5.1 per cent to 167.0 Moz, its first increase of substance in this segment since 2003 driven by the rising consumer spending in emerging countries, the gradual revival of consumption in industrialised countries, and the substitution effect due to the phenomenal rise in gold prices.%% Taking a longer term perspective, it can be seen that there are a large number of industries that use silver on a regular basis, and will continue, no matter what the costs are. %% {{Industrial Use:}} This will maintain itself, for while silver jewellery is aesthetics, industrial and fabrication needs are pragmatic. %% {{Electronics }}- This area has witnessed an explosive demand in PDAs, cell phones and MP3 players. Further, environmental concerns called for leadfree solders, pushing the demand for silver. %% {{Automobiles}} - Europe and England demand persists, but Japan is not likely to be manufacturing for some time, so there may be a surplus which would be balanced by increased European production. %% {{Medicine }}- Antiseptics use silver, and exponentially rising healthcare services will keep absorbing the production in greater quantities. %% {{Emergent Economies and Energy Resources: }}There is an increased interest in silver, especially by the Dragon. There is also a marked increase in use of non -conventional energy resources like solar power, which use silver components. This trend is likely to increase globally and affect silver demand. %% All the above mentioned areas demand silver on a regular basis, and will continue, no matter what the costs are.

{{“If an average man has Rs. 3,000 to invest, he can easily pick a small silver ornament. Yet such an amount wouldn’t even warrant him entering a gold showroom.” - Nitin Sukra}}

{{“We have also begun to look at restructuring our products and creating more lightweight pieces to protect customers against these shockingly high prices.” - Abhishek Haritwal}}

{{“There must be a wide exploration on the design front, and jewellers should not limit themselves to existing sources of inspiration.” - Tarang Arora}}