By Manasee S. Gokhale
After gold prices have sky rocketed and have become unbearably high, people seem to be trying out the other less glittering metal, silver. More Indians have apparently turned to much cheaper silver. Even today, as one official said, rural India invests more into silver than gold.

Silver does give more returns, but is also as dangerous as it is more vulnerable to a bear market that gold is. The stability is in question when one considers silver as an investment option.

Silver prices have seen a much sharper price rise in the last 12 months, gaining 86 percent versus a 45 percent gain for gold, at $17.67 an ounce. In contrast gold's latest rally has driven it well past the March 2008 high to a record just above $1,070 an ounce.

The fall from the March high to the October 2008 low was much steeper for silver than gold -- 60 percent versus 34 percent -- leaving silver still playing catch up with its more lustrous peer.

Investment demand for silver in India is picking up. HDFC Bank, one of India's large gold sellers, is looking at offering silver bars for sale in some cities because of interest from investors, a bank executive said earlier this month.

Rupee woes 
The rupee weakened once again on the back of a slightly stronger dollar and the weakness of the equity markets. Although, yesterday’s state elections did not do too much to tarnish Indian image, the rupee did fall to 46.74 against the dollar.

Oil, dollar and the stocks
Oil fell slightly on mostly poor economic data that sent the U.S. dollar index modestly higher on risk aversion in early trade, but a strong stock market reversed that trade later in the day and oil ended just barely lower while the dollar reversed its decent gains to end lower as well.

Treasuries ended lower as the Dow, NASDAQ, and S&P reversed early losses and rose to find decent gains by the end of the day on mostly better than expected earnings reports.

Gold News
Gold in New York opened at $1058.00/1059.00 an ounce and jobless claims indicate further deterioration of US employment market causing equities to retreat and gold to follow. Gold slipped to a low, but then went higher up again as fund buying pulled it back. It then peaked and then ended a little lower at $1057.00/1058.00 an ounce.

Silver in New York opened at $17.53/17.56 an ounce and ticked lower as the equity markers fell and also as copper lost ground. It reached an intraday low. However, fund buying carried it higher and then for the rest of the session, silver managed to climb higher but ended a tad lower than the opening at $17.51/17.54 an ounce.

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