Attractively low prices, rising demand and a favourable ratio to gold point to better days ahead for the white metal.
A lot of things are falling into place for silver. India has emerged as the world's biggest importer, as declining prices make the metal attractive for consumption as well as investment.
The time has come for those accumulating silver to benefit.
Domestic investors don't have the option of buying paper silver but the trend of buying physical silver has caught on.
This is reflecting in imports, which were 1,921 tonnes in 2012 and have risen to 6,843 tonnes in 2014, equivalent to 21 per cent of the global supply.
Despite record imports in the past two years, imports crossed 5,000 tonnes in the first eight months of 2015 and now estimates suggest the year could end with 8,000 tonnes of silver imports.
"The rising demand is because of low prices. People are buying silver for jewellery, as well as for investment. The festive season also helps demand to scale up," said Monal Thakkar, director of the Ahmedabad-based Amrapali Group, one of the country's largest silver jewellery and article dealers and manufacturers.
From April 2011, silver has fallen faster than gold, as reflected in the ratio of how many ounces of silver can be bought for one ounce of gold.
The ratio stood at 31.7 in April 2011, which was a 27-year low. When silver prices are high, the ratio is low and vice-versa. At the end of last month, the ratio stood close to 80, reflecting the gravity of fall in silver prices. At present, it is trading around 76.
Time to accumulate silver Such levels have been seen on few occasions. In February 1991, the ratio reached near 100, while in 2003 and 2008, it had crossed 80.
However, every time it has gone above 80, the ratio has reverted to 40 or below, indicating a recovery in the price of silver. The white metal has always outperformed gold significantly during such phases.
Ajay Kedia, director of Kedia Commodities who tracks the ratio closely, said, "We will see silver now outperforming gold."
According to him, this means even if one is not bullish on precious metals, past trends suggest that silver will fall slower than gold and when precious metals rebound, silver will rise faster.
Silver is also a high-beta commodity (beta of 4) compared to gold. For every dollar fall in gold it falls by $4 and vice-versa.
There are other reasons why silver could head higher. Silver largely tracks the base metal bellwether copper.
The price of copper has rebounded eight per cent in the last two weeks from its six-year low in August. Most analysts believe China's stimulus package will drive copper demand.
Notably, the supply of the red metal is falling as many mines, including that of Glencore, have announced production cuts.
The Edelweiss Group's commodity arm is among the top silver importers in the country with around 15-20 per cent share in India's silver imports.
DP Jhawar, president and head of the commodities business at Edelweiss, said "Rural demand for silver is also quite strong." He sees a limited downside for silver in rupee terms.
So far, the contraction in industrial demand has aggravated the fall in the price of silver, which is used across industries.
Nearly 55-60 per cent of silver is used by industries the world over, and of this, about 40 per cent is used by electric and electronic industries.
Nearly 30 per cent silver is mined directly while more than half is produced as a byproduct from lead/zinc (35 per cent) and copper (20 per cent).
Another 13 per cent comes while mining gold and is largely a byproduct. The average global production cost of silver is $7.74 per ounce, which makes it viable to produce even at today's price of about $14.6 per ounce.
With the worst over for industrial metals, the likelihood of silver prices going down is limited.
