Silver Market Volatility Leading to Slowdown in Global Trade of Devil’s Metal?

Reports have digitally surfaced on the internet bringing to light a sharp decline in the importation of silver to India. India, as one of the largest -if not the largest – consumers of silver offers lucrative potential to those who wish to profit from precious metals trading. So wherefore would import of the metal into India drop off so drastically?

If not from government intervention, of which there in this case has been none, then one could reasonably suspect that this might be a growing trend affecting the global economy. Silver is expected, by those who follow the market closely, to trade within a wide trading gap in the coming year. It is this volatility that The India Times suggests as the impetus of the import decline, for India’s federal government released its annual budget in March, and kept the import duty on silver the same as before, at 5% of value. Demand at the retail level, by all reports, has not subsided.

The facts on the ground seem to be as followed: silver imports into India, the world’s largest consumer of the precious metal, are set to decline by 27% due to continuing volatility due to the metal’s price discovery mechanism being dictated by commercial hedgers in the paper markets.

To my limited knowledge, there have been no reports out of other countries on this planet or others regarding a decline in import of silver into any sovereign land. But, it does nonetheless make sense that the silver volatility would dampen the market. While mainstream demand has seen considerable drop-off since April 2011, the strong-hands of the market continue on as net buyers, and are everyday joined by an increasing number of silver market partakers.

We’ve seen over past years a huge spike in the volatility and misery indexes. What this has done is spawned a tide of precious metals buying (flee from the US Dollar) as well as “penny-pinching” or, more accurately, saving (or paying debts). And so, people are not spending – in other words, investing – on themselves in their community, because uncertainty plagues the current standard of living expectation.

It seems that a similar sort of skeptics-psychology has been struck in certain levels of the silver market, causing people to shy away from the market.

Sunil Kashyap said investors in India were turned-off by the huge trading range and volatility in the price of silver. Silver imports are expected to fall to approximately 3,500-4,000 tonnes in 2012, down from 4,800 tonnes the year prior, according to Kashyap.

So, as evidence of the deep effects of banker manipulation, it appears that the contrived volatility of silver, making it appear schizophrenic to the ignorant observer, is effecting its trade velocity, if not overall demand.

Or the decline in import does not exist at all, and the piece is 100% misinformation.