Every morning, before stepping out to run errands, a fair number of households in smaller Indian cities take a moment to check the metal rates for the day. It has almost become a ritual, much like checking the weather. Someone planning a small jewellery purchase ahead of a family function might look up the silver rate today in Rohtak before heading to the local market, while a buyer several states away, perhaps preparing for a religious ceremony, checks the silver rate today in Darbhanga to decide whether it is the right time to buy. This simple daily habit reflects how deeply silver is woven into the financial and cultural fabric of Indian life, regardless of which part of the country one calls home.
The Everyday Logic Behind Daily Rate Checks
Unlike gold that is bought on occasions like marriages or to build a family’s wealth, silver has more frequent but utilitarian applications in Indian families. From coins gifted at festivals, anklets and small decorative pieces for kids, pooja items and utensils for auspicious events, silver finds its place in the home.
The relative frequency of these purchases over large ones like gold means that there is some interest in price variations and bargaining. Especially so with utensils and larger items where a couple of rupees per gram could mean significant differences at the closing rate. As a consequence, it’s not unusual for families who want to buy utensils or large items to check rates over a few days before making the purchase.
Local jeweller shops put up the rates (for the day) on a chalkboard or digital display outside, and it’s now a norm for customers to visit the shop and check the latest rates. Failure to update regularly, or having rates that were updated in the past which don’t match the current rates, makes the shop vulnerable to criticism and complaints by customers in their locality.
Anchors Influencing Silver Prices
While it might seem random to the average customer, silver prices are influenced by a few factors that impact the markets.
The biggest influence comes from the global bullion market, where the demand from other countries for use in manufacturing as well as investments drives the price. India has a great demand for silver, and a significant portion of it is imported. As such, the exchange rate for the Rupee against the Dollar also influences local rates.
Demand for silver ornaments and gifts varies depending on festivals, weddings and so on. While prices are usually fixed by the local shop, the demand-supply equation influences the final selling price. Similarly, prices tend to witness a dip during certain times of the year when farming activity is low, and disposable income is spent on gold and silver buying.
Other factors that influence demand for silver in India include its impact on the livelihoods of people in rural areas, especially farmers. Following a good rain and harvest, farmers have more money, which is often invested in festivals involving silver and gold.
Some Markets Are More Influential Than Others
Silver buying patterns seem to differ across regions in India, with some preferring to buy coins with religious images during festivals, others going for ancles, and yet others preferring waist chains. These local buying patterns are significant for local jeweller shops, where they are able to tailor-make their wares to fit the preferences of the locals. It also has an impact on making charges, where intricate designs (preferred by some) have a higher rate than simpler ones.
Local buyers also tend to develop a long-standing relationship with a jeweller shop or family, and tend to go to the same place of purchase over long periods of time. The relationship matters, and can influence the buying decision as much as the price difference between two shops.
The Need For BIS Certification
With increasing awareness about consumer rights, it has become crucial for a buyer to insist on BIS certification for purity when buying silver. Such practices also encourage small-time shopkeepers to formalise their processes, and offer better information about the purity levels at the time of sale. As a consequence, buyers feel more confident about the purity of the silver that they buy.
The competition amongst shops for customers is good, and the consumer benefits by being able to buy products that offer adequate information (like BIS certification) and competitive pricing. In the long run, it’s important to encourage such consumer behaviour, which will help the common Indian buyer to navigate the marketplace with greater confidence.
Buying Silver – The Most Common Asset For An Indian Family
The preference for silver by common Indian families is influenced by the utility of the purchase. It doesn’t have an impact on a large family’s wealth, the way gold would. However, it serves other purposes like small gifts and festival offerings. As a consequence, the buying practices are influenced by a need for regular small purchases. Families which have the necessary knowledge to buy silver (or gold) in this environment tend to get far better value for money than less aware ones, whether it’s in a small town or a big city.
