I genuinely think we’re witnessing a once-in-a generation Silver ETF Demand - Supply - Consumption Paradox and no one is talking about it.
Hear me out.
For decades, silver demand in India was simple. Festivals? Silver. Weddings? Silver. Sweets? Silver varq slapped on everything like it’s compulsory. Kajukatli without silver foil was basically illegal. Demand was organic, emotional, sugary.
Fast forward to the last few weeks. In the last few weeks, almost everyone in India has started tracking silver and investing in it via ETFs. Broker apps have made it ridiculously easy through small amounts, low ticket size, clean UI, one tap and done.
Now think about disposable income and let me give my personal data point (because every good theory needs anecdotal evidence).
I have a sweet tooth. I used to buy kajukatli regularly. It was my weakness. Silver-coated happiness. Now?
That same disposable income goes straight into my broker account to buy silverbees.
Result?
I’m not buying kajukatli. I am healthier and my demat is heavier.
The sweet shop isn’t using silver sheets and the halwaii is confused by lower demand of kajukatli thereby of silver sheets.
Multiply me by lakhs.
Indians are redirecting disposable income from physical silver consumption (sweets, puja items, gifting) to digital silver hoarding.
So what happens?
\> Less kajukatli sold
\> Less silver varq used
\> Less actual silver consumption
Here’s the irony: buying silver via ETFs is actually reducing demand for silver used in daily consumption.
Demand-Supply-Consumption works in strange ways. Think about it. Its demand and supply. Its economics, but its also not economics. Stay Informed.