I realized at my folly of asking such a question when i myself calculated the tonnes of silver required to satisfy the gold purchase. RBI has 1000 tonnes of silver at end of 2005 … thats the latest figure, so its simply not possible.

Sir, I also request you to come up with an article and your targets for long term silver. One fact that bothers me is that according to the US Geological society silver will be the second metal that is going to be extinct at present rate of consumption in next 15-20 years. All easily available mines silver mines have been extracted now 70% of it comes as byproduct of other metals mining. How these facts would change the dynamics of these markets.

Regards,
Vivek, Gurgaon, India

Kalidas Says …. Saturday, November 07, 2009
Silver is an industrial metal and also a semi precious metals and money too like gold. The industrial use of metal came down due to disappearing photographic companies (Kodak, Fuji) where film roll uses silver.

US government used to own billions of ounces of Silver and was on selling spree for over 78 years. This is why many banks in Europe and Hong kong shorted this metal for years. US govt became buyer of silver for the first time in 2008, having run out of entire inventory. there is rising demand from Americans themselves who do not like gold but like silver (white skinned people love white metals/stones like diamond, silver, white pearls etc) The brown or black skinned people use gold because it contrasts with their skin and shine.

Forget US geological survey. They can not scout everything below land. if that was so scarce, silver would have had higher value than gold. Silver is available plenty below ground. It is the best conductor of electricity (better than even copper). If you have poor electronic reception, use silver joints at both ends (twisting copper wire with silver wire), and reception will improve a lot.

It will rise to minimum US$ 60 – maximum $110 per ounce. India today is the major storehouse of silver. What Americans sold found their way into India.

I am fond of silver. My father insisted on “silver glasses” to drink water. In my whole family of 5 brothers, you will find only silver glasses to serve the water. I used to have fancy for this metal, so started buying from $5 onwards to $5.20 – lowest I paid was $4.19. Whenever I went to restaurant and spend HK$ 300 to 500, I would buy at least one bar of 10 taels (375 grams;Chinese use Tael what we call Tola. but one chinese tael = 37.5 grams). I have built very large position of physical silver and will start selling only from $ 48 onwards

I disagree that there is not enough silver below ground. All copper mines have silver too (because they are in same family). Even Hindustan Copper produces silver. All copper producers have silver as their bye-product.

The people are buying gold/silver not fight the inflation – ask any Indian on the street about inflation and he will stare at you as if you are a mad man. They do not know what is inflation. The people today are buying precious metals because they have lost confidence in paper currency. That is the truth.

There was a rumor behind the India’s 200 tonnes Gold Purchase that the RBI paid in Silver reserves for it and not in $$$s.

If true, what could be the implications, i may well judge the reasons for such move.

Regards,
Vivek, Gurgaon, India

Kalidas Says …. Saturday, November 07, 2009
Gold to Silver ratio is 64. If India bought 200 tons, they have to supply 12800 tons of silver. That is, about 640 20feet containers.

Do you believe it?

Government of India is diversifying from dollar (paper) to precious metals physical asset, not from one class of precious metal to another class of precious metal. Does India have 13000 tons of silver? Where do they store it?

Most of the time analysts on CNBC or other Business channel just talk rubbish.

I am sure that sooner then later you will get call from GOI to provide more advise & insight about this complex subject. That will be your true recognition.

RBI may add more Gold.

http://economictimes.indiatimes.com/RBI-may-accumulate-more-gold-to-protect-against-a-weak-dollar/articleshow/5197028.cms