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5 Factors That Influence the Price of Silver

An image of shining molten metal

A recession is generally the ideal time to think about silver investment since every cloud has a silver lining. However, before purchasing silver items, it’s important to understand that the metal has volatile pricing which is affected by several factors including economic stability, supply, and demand, gold prices, etc.

Silver is classified as a precious metal falling in the category of gold and palladium. Apart from being used as jewelry, silver is popularly used in watches and silverware. It has multiple industrial uses as technology develops, like solar photovoltaic systems that use silver metal.

Its pricing is affected by a diverse number of causes, some of which are highlighted below.

1. Investors

It may be surprising to know that some large investors can affect the overall pricing of silver. The Hunt Brothers in 1980, for example, caused an all-time high spike in silver prices. Investors can also control demand for the metal through practices like short selling.

2. Economic Stability

The strength of the US dollar has an inverse relation to the price of silver. A stable economy does not call for the need to invest in silver. It is considered a safe haven investment in times of economic recession. Therefore, you’ll find higher silver prices during economic instability where demand for the metal shoots.

A dollar sign made from silver

3. Supply & Demand

Supply and demand drive market growth and product performance. As demand for silver products increases, it’s followed by an upsurge in its prices. Similarly, if the supply chain is inhibited, the cost of silver goes up.

4. Price of gold

There is a historic association between the prices of gold and silver which can be seen in the gold-silver ratio. Generally, as the cost of gold peaks, it is followed by a similar boom in the market price of silver. When the gold market plummets, silver prices also fall.

5. Technology

The increasing technological prowess of the world drives all materials markets. Silver has a growing utility as an industrial material for products like batteries and medical equipment to microcircuits. A focus on eco-sustainability has also driven the growth of silver use. It’s increasingly being utilized in green technological applications like the production of solar panels and the electric automotive industry.

Silver is a tangible asset that’s valuable for times of economic turmoil. It acts as an inflation hedge as silver holds value much longer than paper currency. Investing in silver by opening a silver IRA is a smart choice.

If you’re considering this investment, contact Orion Metal Exchange, situated in Los Angeles. We are a best silver ira companies and gold IRA company with experienced investment dealers in precious metals.

With 50 years of experience, we’re committed to providing excellent services to our clientele. With our expertise in the field, we will help you make an informed decision about securing your retirement with gold and silver.

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