Why do Indians more smarter in gold and silver tradings ? 🇮🇳

Why do Indians more smarter in gold and silver tradings ? 🇮🇳

Silver price approx $94-$95 per ounce

I also respect @PeterSchiff

Let’s understand it 😅

📄 Paper Silver vs 🪙 Physical Silver

1. Paper Silver (Very Large)

This includes:

•Futures contracts (COMEX)

•Options & swaps

•ETFs (like SLV)

•Unallocated silver accounts

•Bank OTC derivatives

For every 1 ounce of physical silver, there are often 100–300 ounces of paper claims (estimates vary by market conditions).

2. Physical Silver (Limited)

This includes:

•Bars in vaults

•Coins

•Industrial silver used in electronics, solar panels, EVs, medical tech

Physical silver cannot be created instantly, unlike paper contracts.

🏦 Why Banks Hold More “Paper” Than Real Silver

•Most traders don’t want delivery, they want price exposure

•Futures are usually cash settled

•Banks act as market makers

•Same physical silver can back multiple contracts (fractional system)

This is similar to fractional reserve banking, but with metals.

⚠️ Is This a Risk?

Only if: 🚨

•A large number of holders demand physical delivery at once

•Industrial demand spikes suddenly

•Supply disruptions occur

That scenario is often called a “silver short squeeze”

Key Reality 🤞

•Paper silver controls price

•Physical silver controls reality

•Price ≠ actual scarcity (until stress hits)

Context 👍

✔️ Yes, paper silver vastly exceeds physical supply

✔️ This is normal in derivatives markets

⚠️ But it creates systemic risk if trust breaks

Whether holding physical silver makes sense in India 🇮🇳

When Holding Physical Silver Makes Sense

1. Hedge Against Inflation & Currency Risk

•Silver protects against rupee depreciation

•India imports silver global price + INR fall = price benefit

•Historically, silver performs well during high inflation & uncertainty

3. Strong Industrial + Cultural Demand in India

•Used in:

•Solar panels ☀️

•EVs & electronics

•Jewellery, pooja items, utensils

•India is among the largest silver importers

➡️ Long-term demand is solid

3. You Want Asset Outside Banking System

•No counterparty risk

•No demat, no app, no broker

•Useful in financial stress scenarios

❌ When Physical Silver May NOT Make Sense

1. Storage & Security

•Silver is bulky

•Needs locker or secure storage

•Locker cost reduces returns

2. GST & Making Charges

•3% GST on purchase

•Jewellery has making charges

Coins/bars are better than jewellery for investment.

3. Liquidity Issues

•Selling quickly at best price is harder than gold

•Local jeweller prices may vary

🪙 Best Ways to Hold Silver in India

🔹 Physical (Best for safety hedge)

✔️ Coins (50g, 100g, 1kg)

✔️ Bars from MMTC-PAMP, Tanishq, Valcambi

✔️ Purity: 999 fine

❌ Avoid ornaments for investment

🔹 Paper / Digital (For convenience)

•Silver ETFs (demat required)

•Digital silver apps (counterparty risk)

Best combo: Physical + ETF ✅

Smart Indian Strategy

•Buy during price corrections

•Accumulate slowly (SIP-style buying)

•Hold long term (3–7 years)

•Prefer coins/bars over jewellery

‼️ Important Tax Note (India)

•Physical silver taxed as capital gains

•LTCG after 36 months (with indexation)

•STCG added to income slab

In my terms of gold and silver ✌️

✔️ Yes, physical silver makes sense in India

✔️ Best as hedge + long-term asset, not quick trade

❌ Not ideal for short-term profit chasing.

Keep learning. 😅