HAS THE GOLD RUN CAME TO AN END?

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In the last 20 years, gold has successfully returned investors a sum of 11.6%, whereas the NIFTY 50 has returned around 14.18%. A sum of Rs 100000 invested in both the vehicles would have returned Rs 898015 and Rs 1418406 respectively.

 The logic behind someone investing in the markets have changed over the years, but the logic behind an investor investing in the gold has remained the same. Gold pretty much has very limited uses. It can either be used for making jewelry or it can be used for hedging portfolio. That's it, no further uses. But still, investors over the course of 200-300 years have been investing in gold. I thought a lot about possible different uses, but I had no answers. 

Rural India is the largest buyers of physical gold with around 768 Tons of gold reserves. A better rainfall means increased gold demand by rural India. This might be the case because more than 60% of marriages in Indian villages are financed via liquidating gold. I won't say that gold demand would drop in the coming years, but I certainly would say that gold has got a competitor and that is Silver. On the basis of uses, silver beats gold by a big margin. Silver has n number of uses. Starting from acting as a metal for making jewelry. 

Silver is a relatively soft and shiny metal. Silver is used for making mirrors as it is the best reflector of visible lights known. Silver paints are used in making printed circuits. It also has antibacterial qualities which are used in clothing to prevent bacteria digesting sweat and forming unpleasant odors. Well, these are just basic uses. It is one of the crucial elements when it comes to manufacturing the future fuel, and that is EV Batteries. It is by far the most electrically conductive element, which means that electricity can be easily pass-through silver. And as it is conductible, it is used in mobile phones, semiconductors, laptops, every possible electronic thing.

 Another important, rather, unavoidable, use of silver is in PV cells. As much as 20-30 grams of silver is used in every solar panel manufactured. It is highly critical. Solar panels and EV batteries are the future of not only India, but for the world. The Same amount of silver is used while manufacturing 2-wheeler petrol vehicles. The demand would certainly increase in the coming years as India transitions from fuel based to electric vehicle-based country. 

Companies like Vedanta and Reliance are on their way to set up a silver manufacturing as well as refining plant in India for which I guess Mr. Modi would definitely give them a land parcel in Gujarat. While taking about the silver used in 2-wheelers, on average 30 grams of silver is used in a 2-wheeler and around 13.47 million units of 2-wheelers were sold in India last year. Considering the rising demand for 2-wheelers in India, approximately 404 metric tons of silver would be consumed by 2-wheelers only, Forget about the entire auto industry or the battery industry or even the solar panel industry. 

We should not ignore the use of silver in our mobile handsets. 5G technology would soon rollout in India. It's just a matter of time. One last yet important thing to know about silver is that silver loses around 40% of its quality when recycled. So, keeping in mind the above-mentioned scenarios, I am not afraid to say that silver is going to be the most important metal in the coming years. 

Now someone like me would think about monetizing the above idea, but how? There is a way to monetize it and the product is silver bees. Silver bees are listed on the exchange where they sell for around 1/100th piece. Meaning 1 piece of 100 grams. We are lucky that the exchange recognized the importance of the mental and introduced this amazing product. It trades at Rs 54.93 (as of 16-09-2022). They were listed on the exchange on 2nd Feb 2022. I would highly recommend you all to buy these bees and hold them for next 10 years. Believe me, neither me, nor the silver would disappoint you. 

Comments

  1. atharva ghaisasSeptember 16, 2022 at 9:03 AM

    So the downfall of gold has began?

    ReplyDelete
  2. Utkarsh BhagwatSeptember 16, 2022 at 9:09 AM

    I am not betting on the downfall. What I am suggesting is that you now have a new and a better instrument to grow your investment.

    ReplyDelete

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