What determines the fluctuating cost of silver?


Quick Answer

The price of silver fluctuates because of the changes in the market and economic conditions. Because the price of silver is volatile, investors must understand its pricing trends before buying or selling.

Continue Reading

Full Answer

Big traders often manipulate the price of silver by decreasing its supply to maximize their profits. If the market price of silver is low, the investors store it in large quantities, causing a decline in the supply. Because of the shortage of silver in the market, its demand increases, causing a rise in its price.

The increasing industrial demand and the finite actual silver deposits cause a rise in its price. Industries use large quantities of silver because it is a good conductor, leading to an incremental decline of deposits in the mines. Sometimes, the quality of silver fluctuates, causing a shortage in its supply and a rise in its price.

Silver prices increase when the value of the U.S dollar decreases. Because silver is a store of value, people invest in silver products to counter inflation during an economic crisis. As more people store silver, a short-term demand occurs, causing an increase in its price. If the value of the dollar increases, fewer people invest in silver, decreasing its price.

Learn more about Currency & Conversions

Related Questions