Silver rebounds from its biggest one-day dollar fall since 1980 on friday.Silver had slumped by 12 percent on Thursday but Asian investors have helped it to add 84 cents to $35.50/oz.

Many big players of the market such as George Soros’ eponymous fund along with Pennant Capital hedge funds and Passport Capital have reduced their positions in gold and silver. iShares Silver Trust (SLV) have reduced their silver holding by 9.9%.

Oil climbed from the lowest in almost two months in New York, trimming the biggest weekly decline in a year, on speculation yesterday’s drop below $100 a barrel was too far, too fast.

Oil had regained from the lowest figures since 2 months after the biggest weekly decline in a year.Futures have increased to 1.1% after decline of 8.6% on thursday.

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Many investors are curious to find answer for this question.As past 2 years silver had surged to its highest ever record and this past week it stood up by 4%.Many analysts have a view that this rally might not be sustainable.Silver in April had the largest monthly jump in 28 years.Though this race was started with gold but now it has been slower in increase.When gold started its most recent run after the banking crisis in fall 2008, it posted a 25 percent gain for all of 2009.

Is it a price bubble ?

Silver is poor man’s gold ,,,not now it is now the smile of rich people.Though silver cannot act like gold but its growing demand world wide has made it a financial investment.

Consumption

If you look at the consumption rate of silver in India for the FY year 2010-11 it has rose up by 80 per cent.That is 2,800 tonne of silver last financial year, against 1,500 tonne sold in 2009-10. The demand is more for the metal in the bar form, rather than jewellery.

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