New Delhi, Silver has gained more sheen on expectation of a revival of industrial demand as economic activities are gradually restarting despite the Covid-19 pandemic across the globe. Prices of the metal are ruling at nearly a 7-year high in India's future and spot markets.

Bullion market analysts say silver has attracted investment demand as it is an industrial metal and its demand for jewellery has also gained amid a bullish trend in bullion in the pandemic season.

Silver has even outpaced gold as the Gold/Silver Ratio - which tracks the two precious metals' relative prices - is down to 93, the lowest in three weeks from the all-time high of 127 in mid-March, said Ajay Kedia, Director, Kedia Advisory. The ratio had slumped to 31 when silver touched over Rs 70,000 per kg in 2013, he added.

Silver futures rose to Rs 53,199 per kg on Thursday in the domestic market, the highest level since September 2013.

However, bullion witnessed a little correction in the domestic and international futures on profit-booking, but the fundamentals are still bullish, said a market analyst.

At the Multi Commodity Exchange (MCX), the silver contract expiring in September was trading at Rs 52,766 per kg, down Rs 292 from last session, while prices rose to Rs 53,199 per kg during the session, the highest level after September 10, 2013 when silver prices rose to Rs 53,955 per kg at the MCX.

August expiry contract of gold was trading at Rs 49,040 per 10 grams, after slipping from the day's high of Rs 49,159 per 10 grams. At the MCX, gold rose to record high of Rs 49,348 per 10 grams on July 8.

Gold and silver have witnessed temporary corrections and fundamentals are still bullish, said Surendra Mehta, Secretary, India Bullion and Jewellers Association. Silver is an industrial metal and its demand for industrial usage is expected to increase with reopening of industry worldwide after lockdown due to Covid-19 pandemic, he added.

Physical gold sold at a premium in India last week for the first time this year, driven by plunging imports and a near halt in smuggling that offset the impact of high unemployment and a rise in domestic prices across Asia that could deter buyers.

As per market analysts, the medium-term outlook for the economic recovery still looks very uncertain and this continues to provide ample room for gold and silver to float higher.

The Silver Institute indicated that silver investment demand increased by 10 per cent in the first half of 2020 as industrial demand declined in the early pandemic season, but started to pick up from May as economies began to reopen, said Kedia.

It predicts that global silver mine supply will drop by 7 per cent in 2020 which supports a bullish run for silver, especially if industrial demand gets closer to normal levels.

Anuj Gupta, Deputy Vice President, Angel Broking and a commodity analyst said that generally silver rallies, tracking a rise in gold prices but silver prices rose this week even after a correction in gold.

Globally, industrial demand for silver has increased and ETF buying is also supportive, he added.

In India, a good monsoon has raised the hopes of good rural demand and when gold prices are high, rural demand for jewellery turns towards silver, said Gupta. He said that silver prices may test Rs 54,000 to 55,000 per kg levels soon.

Comex gold for August expiry was trading $1,807.55 per ounce, down $6.25 or 0.34 per cent from the last session while September contract of silver was at $19.64 per ounce at Comex.