Silver has a fascinating history. This brilliant greyish-white metal was first mined 5000 years ago, from a place called Anatolia, which is modern-day Turkey. Silver is seldom found in the Earth’s strata as a native element. It is obtained from ores of silver, lead, silver-nickel, and lead-zinc that is obtained from various mines scattered around the world. Some of the leading producers of silver ore are Bolivia, Mexico, and Peru, who have been mining it since 1546.
The silver price is influenced by the growth of industrial and manufacturing economies. The global production of silver has not improved over time, which ensures that the silver rate today always remains favourable. The demand and supply scenario also guarantees a high silver commodity prices. However, it is still advisable to check the silver price today before putting money into it.
Properties of Silver
Silver is highly malleable, lustrous, reflective, and an excellent conductor of electricity. It even has anti-bacterial properties. Silver has countless applications in science, industry, medicine and art. Yet, these properties of silver are only the tip of the iceberg, when we try to understand why silver is invaluable to the global economy. Silver, along with gold and the platinum group of metals, is included in the group of precious metals.
The demand for silver is majorly in three categories- industry, investment and jewellery. Taken together, these three categories make up around 95% of the demand for silver annually. Silver is used in the construction of high-quality musical instruments, various alloys, water nuclear reactors, coins, and dental alloys. People have accumulated silver as an investment and an indicator of value for thousands of years.
Silver Demand and Supply
Silver prices are highly volatile and are dependent on both industrial and economic factors. The points that are the most important determinants of the silver price are- supply and demand levels, availability of silver scrap metal, inflation, demands of industry, and gold prices. The balance between supply and demand rates of silver is an important point that influences its price. The reserve of silver is limited, and research shows that its production has actually been on the decline recently. Further decline is predicted in the future due to increased mining costs. On the other hand, demand for silver is fairly constant.
Things to Consider Before Investing
If you are planning to invest in silver, you should keep an eye out for events that influence the demand/supply equilibrium. Factors like mining strikes and the discovery of new silver mines affect supply rates, which could influence the silver price in various ways. On the other hand, fluctuations in the silver rate today amongst traders can also move the silver commodity prices.
Investing in silver is a good way to protect against the side effects of inflation rates and the weakening of the US Dollar. The Silver price today is in the US Dollar, and often has an inverse relationship with it. It means that as the value of the dollar weakens, the silver commodity price will rise. Traditionally, the silver price has strong positive correlations to the price of gold. Many traders monitor the gold-silver ratio closely to approximate the silver rate today before making judgement calls to invest.
Silver is also set apart from most other commodities since many merchants consider it as an alternative currency. When the value of currency wavers during inflation, traders can turn to silver as a better store of value.