Go for partial profit-taking in silver ETFs as prices surge

STAGGERED BUYING IS THE PREFERRED STRATEGY FOR NEW INVESTORS

- SAIKAT NEOGI

AS SILVER PRICES have surged in the last one year and are trading above the 3 lakh/kg mark, investors should consider partial profit taking.

An extreme price rally may trigger mean divergence in any security and silver rallies tend to be sharp followed by corrections.

Silver has higher industrial demand and also faces supply constraints, which makes it more volatile than gold. While the structural drivers such as supply tightness and investor interest are intact, near-term volatility can lead to sharp corrections. A partial profit-taking and portfolio rebalancing approach is more sensible than trying to time a peak.