Kotak Mutual Fund has temporarily halted new investments into its silver fund-of-fund, citing a domestic silver shortage that has propelled local prices above global levels. This move follows a 3.5% surge in Indian spot silver prices to 158,118 rupees per kilogram on Thursday, contributing to over 84% year-to-date gains, amidst a broader global rally driven by safe-haven demand and supply constraints in the London bullion market.
Kotak Mutual Fund has temporarily suspended new investments into its silver fund-of-fund, citing a domestic silver shortage that has driven local prices above international benchmarks. This action follows a significant 3.5% surge in Indian spot silver prices on Thursday, reaching 158,118 rupees per kilogram, contributing to an impressive year-to-date gain exceeding 84%. The domestic price inflation is occurring amidst a broader global rally in silver, with international spot rates hitting multi-decade highs. This global surge is primarily attributed to heightened demand for safe-haven assets and persistent supply constraints within the London bullion market. The fund's halt underscores the acute supply-demand imbalance in the Indian market. The fund's decision, while aimed at protecting existing investors from potential dilution or adverse pricing, signals a cautious stance regarding the sustainability of current premium levels. The mixed sentiment and cautious tone associated with the news, despite the strong price performance, suggest underlying concerns about market stability and liquidity in the Indian silver market.
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