Silver is classified as a precious metal. It shares the same space as other valuable commodities / precious metals like gold and platinum. The white precious metal has always been in demand add to that it is not available in infinite quantities which is why it is a worthwhile investment. Besides scarcity and high demand, there are other factors that affect the price of silver. Any silver bullion owner needs to know what they have and what they can expect to get for it should they decide to sell silver bullion Brisbane.
To understand the pricing trends in the silver market, you need to study the market carefully. Sometimes the factors or trends might seem like they are working against each other. Let’s have a look at some of the factors that affect the rise and fall of the silver price.
- Supply and Demand
The supply of silver might not match the demand. This is because silver is used in so many industries and applications. Sometimes, it is just a perception that the price could go up or down and not the actual truth that meets the performance of silver in the markets. Silver is largely a manufacturing metal
The price of silver can be indirectly moved by the changes in technology. Many of these technologies choose silver because of its special properties. In some instances, silver works better than other items. Silver is also a key component of solar photovoltaic systems which have become more popular as more people move towards green energy.
- Economic Trends
Silver like gold is considered to be a great hedge for wealth. Silver generally retains its purchasing power in tough economic times even as currencies lose theirs. Also when the economy isn’t doing so well, it doesn’t quell the appetite for some luxury watches and jewellery. Silver is used in a lot of high-end goods because it is durable, does not rust or tarnish, and can keep its beauty and lustre for years.
On the flip side, demand for silver may decrease even when the economy is vibrant. This is because despite the economy being at its best, silver does not generate an income or offer dividends.
- Strength of the Dollar
The U.S which dollar is the leading global currency has an inverse relationship with silver. Silver investors who follow the market will have noticed that the price of this precious metal is heavily impacted by the strength of the U.S Greenback. They may sell silver bullion Brisbane when the dollar is weak and the commodities market is performing well.
- Gold performance
Gold and silver have a close relationship. The gold/ silver ratio is important in determining where the price of silver is going. The ratio measures the amount of silver required to purchase one-ounce of gold. By measuring the change in ratio over time, investors can estimate and make an informed choice when they sell silver bullion.
Investing in Silver
Along with these factors, you need to understand the difference between speculation and investment, as well as short-term and long-term investing. The very nature of markets is that they react rapidly to short-term factors like those cited above. Speculators and end-users, such as jewelry manufacturers, find it important to watch these rapid changes.