Indians scramble for silver as prices slump

By Ruchira Singh

MUMBAI, Oct 20 (Reuters) - Indian traders may not be buying much gold with prices close to all-time highs, but are scrambling to stock up on silver that fell to its lowest in a little more than a year, dealers said.

"There is already a shift from gold to silver... people are very comfortable with silver prices," said Ajay Singh of Kiran Jewellers, a wholesaler in Jaipur.

Singh said his silver sales had risen five-fold from the same period last year, ahead of key festivals, Dhanteras and Diwali, next week. On the continuation charts of the Multi Commodity Exchange of India Ltd (MCX), silver futures MSVc1 were at 17,541 rupees per kg, close to a 13-month low struck late on Friday at 16,857 rupees.

The current price is down 36 percent from its record high at 27,500 rupees on March 17.

Suresh Hundia, president of Bombay Bullion Association, said silver imports had accelerated since August, and demand was heavy early this month, when prices were in the range of 19,000 rupees and 20,000 rupees.

"Earlier in the year, there was hardly any demand but now since August, about 250 tonnes is being imported every month," Hundia said.

Yet, imports stood around 800 tonnes so far this year as against around 2,280 tonnes in all of last year, he added.