What Affects the Price of Silver?

When trading precious metals, it’s important to be aware of the factors influencing their prices. Like all assets, Silver prices are mainly driven by supply and demand. If demand is higher than supply, prices will increase, and vice versa.

The global macroeconomic outlook also plays a vital role in determining price stability. When job markets are stable and employment rates are high, there tends to be an increase in Silver consumption, since people are more likely to buy jewellery. Conversely, when a country’s economic prospects are uncertain and unemployment rises, consumer spending inevitably drops, decreasing demand for Silver.

However, Silver has many other applications. Technological advances in the solar photovoltaic field have increased overall demand for this precious metal, which could push its price up over the long term. The commodity is also widely used in sectors such as medicine and electronics.

Most commodities are denominated in U.S. Dollars. Every movement in the value of the greenback, therefore, has a direct effect on the price of Silver. However, the 2 assets are negatively correlated. When the U.S. Dollar strengthens against other currencies, Silver prices tend to drop, while if the Dollar weakens, the price of Silver generally rises.

Online commodity trading brokers allow traders to invest in precious metals like Gold, Silver, Platinum, and Palladium. Advanced services like UFX’s online platform help traders achieve greater market exposure by investing in assets like commodities through leveraged CFD trading.