Factors That Affect Silver Prices

by Josh Biggs in Finance on 20th September 2018

When it comes to being grouped under “precious metals of the world”, there are only a few elements that have that distinct honor. Gold, platinum and silver, all of these elements have a high monetary value and are considered to possess a lot of economic value.

That value is associated with them primarily for their scarcity. It is also the reason why the prices on these elements can vary heavily. Silver is no different. You only need to look at Gold Bullion Australia silver sales to see that its demand has been relatively even for quite some years. However, the price of the valuable element has greatly fluctuated.

So, what factors affect silver prices and to what degree? Find out below:


In the 21st century, this makes a lot of sense. Thanks to technology it has become easier for people to come with multiple alternatives as well as new innovations that have made application of silver go beyond its more traditional uses. Silver had been a very important element within the film industry. However, inventions of new techniques and equipment have allowed silver to be used in more effective and efficient ways.

For example, mirrors used to be made exclusively out of silver. However, now aluminum alloys as well as other elements constitute as acceptable substitutes. On the other hand, thanks to the commitment of the world to greener and more efficient means of procuring electricity, the use of photovoltaic systems has seen an increase in the use of silver.

Economic Realities

This is where the minute details of silver’s role in the global economy come into play. Purely from an economic perspective, silver is considered as one of the safest investments that anyone can make. The primary reason for that is silver’s ability to retain its overall value in the long-run.

If there is a significant change in the global economy, the prices of silver are likely to fluctuate a great deal. In a strong economy, silver serves as an essential raw material for development in industries as well as for commercial use. Similarly, in a relatively unstable economy, the price of silver as well as other precious metals is expected to rise as well.

The price of silver on any given day is dependent on how the global economy operates.

Government Policies and Interest Rates

The interest rates in the open market as well as the government policies can have a huge say in the overall price of silver. As silver is considered a safe investment, most investors opt for interest payments over an extended period. This may end up lowering or increasing the interest rates in the market depending on the on how much is being invested on silver.

Similarly, policies set by the government can also influence the price of silver. Just like gold, silver bullions are also the medium in which central banks deal with one another internationally. Government policies regarding silver may manipulate the silver prices.


Categories: Finance