Shoppers keeping an eye on the silver price today in the days leading up to Diwali often find themselves cross-checking figures with those who track the silver price in Delhi, since the capital’s wholesale bullion market frequently sets the tone for pricing trends followed across much of northern India during the festive season. Silver enjoys a particularly strong surge in demand around this time of year, as families across the country consider it an auspicious purchase that symbolises prosperity and good fortune for the year ahead. Exploring how this seasonal demand shapes buying behaviour, alongside newer ways of holding silver, offers useful insight for anyone planning a purchase during this period.
Why Dhanteras and Diwali Drive Silver Sales
Amongst all occasions related to silver buying in India, the days around Dhanteras and Diwali are most significant, as many Indian homes believe this to be the most auspicious time to welcome new silver in the form of coins, idols of gods or everyday utensils into the home. This leads to a heavy concentration of annual silver buying to occur within a limited window, which many jewellers and bullion dealers plan for well in advance
This may mean that some buyers who are visiting stores on the peak days of the festive season tend to face long queues and less scope for bargaining on making charges, given that the seller needs to serve a high volume of customers
Some buyers plan ahead of the peak festive season and tend to see a less busy and more flexible environment at shops a week or two ahead of the peak season. While making charges tend to remain the same in most cases, understanding the nuances of the buying patterns allows families to complete their festive silver shopping in a relaxed manner well ahead of the peak season.
Silver Coins as a Preferred Festive Purchase
During the festive season, apart from silver jewellery, silver coins depicting images of gods are especially liked by many as a means to participate in this tradition due to their simplistic pricing structure. Unlike jewellery, which usually comes with a higher making charge, the value of coins tends to closely reflect the base price of silver with a few extra charges added on for minting and certification, which makes them significantly more affordable than many other silver products.
The ease of storage, gift-giving, and passing on to future generations, and the standardised weight of coins tend to also help it stand apart from other silver products as a means to engage in this age-old buying practice with a far simpler price discovery mechanism. When buying coins, it is advised to check the purity of the coin as indicated on the coin itself and have a certification from a reputable source which indicates that the coin actually has the purity as claimed at the time of purchase.
Exploring Silver Through Mutual Funds and ETFs
Apart from buying physical silver in the form of coins and bullion, some Indian investors also choose to explore the option of buying units of silver exchange-traded funds and mutual fund schemes which give exposure to the price of silver without the hassles of storing or ensuring purity of physical silver with every purchase.
This method appeals to a young and urban buyer who is comfortable transacting online and is looking to make paper gains on the price movements of silver without having to worry about any of the hassles related to storing or checking the purity of every bar or coin that has been bought. However, those who are more interested in participating in the tradition of buying silver gifts tend to prefer physical products over paper gains on a mutual fund scheme as they feel that it lacks the cultural and sentimental value of traditional gift-giving. Those who wish to engage in both usually maintain a small physical collection of silver coins at home while also separately investing in paper instruments as a means of diversifying their portfolio.
Comparing Bullion Dealers With Traditional Jewellers
Those who are buying large amounts of silver bullion for investment purposes or for big gifts during the festive season tend to find that there is value in comparing prices from traditional jewellers to those found at bullion dealers. While traditional jewellers tend to offer a far greater variety of products, including customised jewellery and figurines that are especially sought after during the festive season, bullion dealers tend to be able to offer far more competitive rates on standardised products like coins and bars due to the far lower overheads that they carry.
Understanding the difference that these two kinds of sellers have on the festive season buying experience can allow buyers to not overpay for customised or traditional products while also allowing them to save on standardised bars and coins, which have little to no making charges involved. Those who are primarily interested in the investment value of silver without being concerned about the design of the product tend to find more competitive pricing at bullion dealers, while those who are more interested in traditional gifts continue to choose traditional jewellers for their superior craftsmanship.
Sensible Practices For Festive Season Buying
Asking for itemised billing, which shows the value of the silver separately from making charges and other additional charges, is always a prudent move when buying gold or silver bullion. Checking the purity of the product, especially for coins, during purchase is always a good idea. Comparing prices across a variety of sellers, even during the busy festive season, can yield rewarding results for those who are looking to buy during this time. Storing the silver correctly at home after purchase is also a good idea, as silver tends to tarnish with time and requires some maintenance to retain the appeal and value that it had at the time of purchase.
Conclusion
The festive season creates a unique buying landscape for silver in India, which reflects the unique role that silver plays as both an investment and a tradition that is carried forward through generations. By understanding the buying patterns linked to the Dhanteras and Diwali period, exploring the options related to both physical and paper instruments and learning sensible buying practices, families can make the most of buying silver during this festive season
