For its applicability in jewelry, photography and electronics, silver has long been in demand as a precious metal and an industrial component. As with any other commodity, the price of silver moves based on the supply of raw silver and the demand for its use in specific applications. However, several other factors influence the price of silver, from advances in technology to movements in the global economy.
The price of silver can change with the supply of the metal and its availability on the open market. In 1859, discovery of the Comstock Lode in Nevada brought $50 million worth of silver into the market. The consequence of this sudden glut was a steep drop in price. In the 1970s, brothers Nelson and William Hunt attempted to corner the market on silver by buying up more than three fourths of the market. Their efforts drove the price up from $5 to more than $55 per ounce.
Silver Price Factor
The price of precious metals will vary based on a number of factors. A number of factors may influence the price of silver or gold. Factors influencing precious metal commodity prices include current supply, potential supply, current demand, expected demand and geopolitical events such as terrorist attacks or major economic events. Geopolitical events are significant influences on precious metal prices since, in times of uncertainty, markets tend to favor the tangibility of precious metals over paper currency.
Effect Of Price Silver
When the supply of silver remains stable, the demand can move up or down. When demand for silver increases, so does its price. When demand falls, so do prices. Demand can change as a result of economic forces, investor tastes and new applications. When new photographic technologies replaced the need for silver nitrate and other silver based ingredients, prices for silver fell. The increased demand for silver in solar panels is expected to increase the metal’s price.