Factors that influence the price of silver include supply and demand as well as speculation, according to CBMint. Economic factors that affect demand include currency health, interest rates and stock market indices. During market trading hours, the price of silver can change every few seconds, if not sooner.Continue Reading
Silver typically tracks the price of gold; as gold prices rise and fall, silver tends to do the same, according to Investopedia. Important industries that affect the demand for silver include electronics, where it is used for switches and circuits, film photography and solar panels, where silver paste is used to conduct electricity.
Silver is extracted from ores of copper, gold and zinc. Because copper accounts for 26 percent of all silver mined and is used in new home construction, changes in the housing market can affect demand for copper and indirectly affect demand for silver, which ultimately affects silver's price.
Investors often use silver to hedge currency risk as the dollar weakens. Because silver is used both as an industrial metal and a hard asset, it is one of the most versatile metals available. Investors can buy actual physical silver or "paper" silver, where an investor does not take actual possession but instead allows it to be held on his behalf by an exchange traded fund (ETF) or depository, according to CBMint.Learn more about Currency & Conversions