Hindustan Zinc shares surge 4% amid rising silver prices

Shares of Vedanta-promoted Hindustan Zinc surged 4% to Rs 535 in Wednesday's trade on the BSE after silver prices reached the Rs 1 lakh per kg mark in Delhi-NCR’s bullion markets on Tuesday. Hindustan Zinc is India's largest producer of silver and refined silver.

Meanwhile, on Tuesday, December silver contracts on the MCX hit a new lifetime high of Rs 99,475, gaining Rs 2,019, or over 2%. March 2025 futures were trading at Rs 1,01,688, up Rs 1,847, or 1.85%.

Commenting on Silver’s rally, Anuj Gupta, Head Commodity & Currency at HDFC Securities said that silver has been creating new records and in physical markets in Delhi-NCR, it has surpassed Rs 1,00,000 levels.

Gupta explained that silver’s appeal is rising due to industrial demand and its status as a safe haven, alongside its pricier counterpart, gold. He anticipates an additional 3-5% increase leading up to Dhanteras.

Year-to-date, silver has gained 33%, or Rs 25,036 per kg, according to Gupta.

"Silver prices have continued their rapid upward momentum, surging past Rs 100,000 in the physical Indian markets, with the fast-paced rally suggesting that prices could reach Rs 110,000 before Diwali. As retail investors rush to buy silver, spurred by the heavy rise in gold prices, silver appears relatively more affordable at Rs 100,000 per kilogram, while gold is now trading at Rs 78,000 for 10 grams," Jateen Trivedi, Vice President, Research Analyst - Commodity and Currency at LKP Securities said.

Uncertainty surrounding the US presidential elections and the BRICS nations' aim to move toward de-dollarization is also driving demand for precious metals. With the elections approaching, concerns about Kamala Harris's chances are bolstering safe-haven demand.

As of today, the U.S. Dollar Index (DXY) hovered near the 104.15 mark, gaining 0.07%.

The BRICS summit's goal of aiding more countries under its umbrella and countering the Western-led world order could accelerate the de-dollarization process, benefiting gold and silver. However, the strength of the dollar index and US bond yields may limit gains for these precious metals.

At 11:14 am, the scrip was trading 3.2% higher at Rs 529 on BSE. Its shares have surged 66% in 2024 to date and 88% over the past two years, with the company currently holding a market capitalization of Rs 2,23,519 crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)