Understand the Factors That Drive the Market Price of Silver
Silver is known as poor man’s gold and is popular as low investment option in comparison to gold. Demand for this dear metal is on a rise in industrial and commercial sector to produce an assortment of electronic devices. Therefore, the silver prices are escalating, since last decade.
Some factors that affect silver bullion prices in the market today are many.
Dollar stability – The stability of the US dollar is primary silver market price meter. Strong dollar means silver price is on the low side and vice versa. Even the gold price in the market is in strong reverse connection with the US dollar value.
Supply level – Silver supply level in the global market is also a crucial silver market price indicator. High supply means the rates of silver will remain low. As there is an increase in demand for silver in industrial sector the silver deposit globally is being diminished at 5% rate every year. It means in near future. The world will experience physical silver deficit.
Demand – Demand is also a driving factor for silver prices to move upwards. If investors are actively purchasing silver bars and bullions then obviously silver rates will increase.
Technology – Development in electronic sector in recent years has seen an increase in sales of computers, plasma TV, Smartphones, and more. These Smart devices need considerable silver components to operate properly, so there is an extreme demand.
Unemployment rate – This is also a crucial economic sign that affects silver prices in global market.
Hyperinflation – This situation is an absolute guarantee that silver market price will rise sky high.
Volatility – Investors are concerned about the high volatility status of silver, so when they witness the dwindling of the US dollar they start stocking gold and silver investments
Government policies – The change in policies to keep economy afloat are so strong that the rates of silver get affected.
Global economic environment – It is also a crucial driving force for change of silver prices that inevitably affect tangible silver bullion prices and intangible silver futures.
Rising population – Increasing population in world’s largest silver shoppers or investors like China can impact silver rates.
Gold price increase – The silver gold ratio is debatable but you will see that there is historic relationship between silver and gold prices. Generally, when gold price moves, silver prices follow.
In general silver prices are affordable but continues to rise. Small investors find investing in silver coins and bullion relatively cheap than current gold price.