..... . VALI disclosures . .....: 12/05/25... Silver Shines better than Gold today...Gold has sped ahead in what appears to be a race with silver. The audience is waiting for Silver to catch up. So, the question is, will silver pick up and close the gap?

Monday, May 12, 2025

12/05/25... Silver Shines better than Gold today...Gold has sped ahead in what appears to be a race with silver. The audience is waiting for Silver to catch up. So, the question is, will silver pick up and close the gap?

And therefore, is it a better investment option now than gold today?

Gold price has already jumped 40% over the past 12 months, and investors are sitting on some decent gains, in fact, significant profits. Over the same period, silver, the close relative of gold, is up just 15%. A poor showing at best. But calling the shots purely based on returns is perhaps not the right move.

Gold, Silver Rallies

Here, two things cant help you decide if silver has more room to move and to answer the question: Is silver a better bet than gold today?

First, the gold and silver rallies. Gold has seen multiple bull runs throughout its long history. The most recent major bull run in gold began in October 2023. The price of gold per ounce has risen from $1,850 to nearly $3,350, a jump of $1,500, a whopping 81% in less than three years.

Silver was a slow starter, and not until February 2024 did it show a spike. From $23, the price jumped to $34, a return of 48% in just about 14 months.

A DSP Mutual Fund study examines rallies in gold and silver, revealing which metal outperforms and when silver significantly outperforms gold.

The study shows silver has outperformed gold in 10 out of 26 years. But whenever there is a rally in precious metals, then Silver tends to outperform significantly compared to Gold.

Here’s when those big rallies happened and Silver emerged as the winner. “During major price surges - such as from April 2003 to March 2008, December 2008 to April 2011, and December 2018 to January 2021 – silver’s gains significantly exceeded those of gold.

For example, from December 2008 to April 2011, silver rose by 353.4% compared to gold’s 78.6%. The data suggests that while both metals are valuable, silver tends to outperform gold during periods of strong market rallies.”

But Silver has risen by about half as much as gold during the recent boom. Doesn’t it look like a better bet at current gold and silver prices?

Gold-to-Silver Ratio

The second way to look at it is by tracking the ‘gold-to-silver ratio’. How much silver would be required to buy an ounce of gold is what defines this ratio. At the current gold price of $3,333 and silver price of $32.60, the ratio is 102, much above the long-term average of 70.

For the ratio to fall back to its long-term average, the silver price has to jump to $48, with the gold price remaining constant. Or then the price of gold has to correct. As things stand today. Silver looks much cheaper compared to gold, currently. Doesn’t it seem like a superior bet at the silver and gold rate today?

Why Silver can go higher…

The forces behind the rush in the two precious metals are largely the same. Starting with geopolitics, the demand for safe-haven assets grew as Trump’s tariff policies looked to endanger global economic growth.

For silver, there is an additional factor that works - the supply. When demand exceeds supply, the price gets a boost. The small silver market, with an annual turnover of $30 billion, can significantly impact the price even if there’s a slight change in demand.

For the 5th consecutive year, Silver's demand is expected to exceed supply in 2025. Against a global supply of 1.05 billion ounces, there is a demand of 1.20 billion ounces. It’s anybody’s guess how it will impact the price.

What’s holding prices back…

The industrial demand for silver is rising. But the investment demand looks tepid.

Gold prices faced a similar situation about two years back. At that time, gold lacked investment demand and had tight demand-supply conditions, although not as tight as we see in silver today.

Then, things changed quickly. The big investment demand for gold came from an unexpected quarter - the World’s central banks. In total, they bought over 3,000 tonnes of gold over the last 40 months, setting the yellow metal on fire. Trump’s tariff, leading to a trade war, is adding fuel to the fire.

The lack of investment demand is perhaps holding back silver from the big spike from current levels.

From where this investment demand for silver will come remains unclear.

In the international market, the gold price is $3,333 per ounce, and the silver price is at $33.60 per ounce. In the Indian market, 10 grams of 24-carat gold rate today is Rs. 96,330, while 10 kg of silver rate today is Rs 96,520.

Several pointers signal a rally in silver prices from current levels. However, that may not happen anytime soon. Had the price trends moved purely on past trends and expectations, everyone would have been a successful investor.

It’s always better to be diversified both in gold and silver, till the time you have the backing of central banks and the uncertainty on the global trade front, the shine on the two precious metals doesn’t look fading away soon.

Source: FinancialExpress

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Monday, May 12, 2025

12/05/25... Silver Shines better than Gold today...Gold has sped ahead in what appears to be a race with silver. The audience is waiting for Silver to catch up. So, the question is, will silver pick up and close the gap?

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Today's

20/09/26, Levels for 22/09/25

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