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ISLAMABAD: Islamabad’s jewelry markets present the scene of a haunted town as deserted shops await customers amid sky high gold prices, even during the peak wedding seasons.

As the precious yellow metal gets out of reach for a common man, silver, its cheaper cousin, has seen an unprecedented rise in demand in past few months, not for jewelry but bullions.

Over the past year, the prices of silver have increased by approximately $13.32, or 39.30 percent, per ounce globally, according to silverprice.org monitor.

In Pakistan too, the metal surged to as high as Rs15,188 ($53.5) an ounce this month, amid strong demand for silver bullions by investors and common public.

“People are buying silver like you buy vegetables,” Shafiq, a jeweler who has been in the business for 18 years and only gave his first name, told Arab News this week.

“Almost 75 percent of my customers now are coming for silver bars. The demand is unlike anything I’ve seen before.”

The surge comes as Pakistanis, long accustomed to saving and investing in gold, turn to silver due to record-high gold prices, amid global uncertainty.

With gold trading above Rs430,000 ($1,516) per 12 grams, silver has emerged as the “poor man’s gold” due to its accessibility to middle-class investors and small-time savers alike.

Huzaifah Zahid, a young jeweler in Islamabad who requested his shop not be named, says the latest rally started with an online buzz.

“Three months ago, there was no demand at all,” he said. “Then suddenly, social media created hype about silver being undervalued, and everyone started buying. Now there’s a shortage in the market.”

Silver is an excellent electrical conductor that’s used in circuit boards and switches, electric vehicles, batteries and solar panels. Of late, the growth of industries like solar power and electric vehicle manufacturers has dramatically increased the need for silver.

Over the past three months, Zahid said, the demand has exceeded the supply and now people in Pakistan are booking silver bullions in advance and on premium.

Analysts point to global factors driving up silver’s value.

Muhammad Abdullah, a commodities expert at Zaid Ali Khan Securities, said the traditional price ratio between gold and silver, which was historically around 1:70, has widened in recent years to nearly 1:100 due to the skyrocketing gold prices, making silver appear undervalued to investors seeking long-term returns.

“Silver can actually outperform gold in terms of percentage returns,” Abdullah said. “For investors, this is an attractive time to enter the market, but only if they buy near the actual rate and not at inflated prices.”

SPECULATION AND PREDICTIONS

The sudden spike in demand has sparked warnings about speculative hype.

“About eight or ten years ago, something similar happened,” recalled Muhammad Shiraz Qureshi, 60, who is in the jewelry business for over 35 years.

“Prices shot up artificially, people sold assets to buy silver, and when the rate dropped again, many suffered losses. This pattern keeps repeating.”

Zahid said while silver’s global use in solar panels and electric vehicles has added value to the metal, Pakistan’s market has “overheated.”

“It’s being sold for up to Rs2,000 ($7) above the market rate,” Huzaifah said. “If you can get it at the proper rate, it’s a good investment, but right now, it’s overpriced.”

DO NOT ‘RUSH INTO BUYING’

Jewelers have urged people to exercise caution while buying silver, warning of a price correction once the current excitement fades.

“People should not rush into buying right now,” Shafiq said. “Wait for a couple of months and see how the trend settles.”