Silver Bar Prices Plunge BD1,000 in Bahrain

Silver bar prices in Bahrain have crashed by almost BD1,000 a kilogram in four months, leaving buyers nursing losses and draining demand from a market that had drawn a rush of small investors.

A one-kilogram bar that sold for about BD1,700 at the peak now costs roughly BD792, traders said, after global prices fell and confidence in the metal gave way to caution.

The plunge has failed to bring buyers back. Many are instead holding off, wary that prices could fall further after one of the sharpest swings seen in the local silver trade in recent months.

Jaafar bin Jaafar, of Bin Jaafar Jewellery, said demand had dropped despite the lower price.

‘The price of a kilogram reached about BD1,700 during the rise, while today it is around BD792,’ he said. ‘That is a fall of close to BD1,000 in no longer than four months.’

He said traders had expected the lower price to draw people back into the market, but the speed of the fall had shaken buyers.

Silver is also prone to steeper moves than gold, he said. A fall in gold can bring a much larger slide in silver, adding to fears among investors who bought near the top.

Sayed Mahmood Jalal, of Dilmun Bars, said demand for silver bars had fallen as prices moved back towards the levels seen before the rally.

Buying had surged while prices were climbing, with investors rushing to secure bars in the belief that the rise would carry on. The fall has since led many to doubt the case for holding silver as a short-term investment.

Some investors have begun selling their bars, although sales remain limited, Mr Jalal said. Others are holding on in the hope of a recovery.

A number of buyers still regard the fall as a normal market correction and believe silver has room to rise over the longer term.

Ali Hassan, who bought silver during the rally, said his first bar cost about BD400. Several of his friends entered later and paid as much as BD1,300.