Because of its classification as a precious metal, silver is considered as a valuable commodity, just like gold, platinum, and palladium. Silver, a beautiful white metal has always been in demand owing to its unique characteristics and scarcity. One thing to note about silver is that its demand stays constant while its prices tend to fluctuate every now and then.
Because investing in silver bullion is a safe and viable option, people give it preference over investing in properties as well. Investing in silver is also easier. You don’t necessarily need an expert like you need one in property investments. When people invest in properties they need a professional service to manage their finances, like Stamford Capital. But while investing in silver bullion, all you have to do is focus on global factors and trends that influence the prices of silver bullion and make an investment.
Here are a few global factors that are widely considered responsible for affecting prices of silver.
1- Global Supply and Demand
The supply and demand for silver is one reason that makes silver so valuable. Its global supply is less and demand is constant. But as the basic rule of economics states that if there is an actual increase or decrease in supply or demand, the prices of a commodity will move. For instance, if there’s a strike at a major silver mining company, then silver prices will spike for a short term. Similarly, if there’s an announcement of a new use of silver, like in solar panels, it will generate more demand and will create an upward trend in silver prices.
2- Global Economic Trends
When the economy is good, people spend a great deal of money buying silver in many forms, like jewellery. But if the economy is poor, such purchases are likely to go down. This is why the level of growth and economic health in emerging economies is considered as a major indicator of the way silver prices will be affected in the days to some.
3- Macro Economic Trends
Silver, like gold, is considered to be a safe investment. This means that silver retains its value and purchasing power better than paper currency and other assets in the times when there is economic uncertainty. When the global economic conditions worsen, there is a spike in silver prices and prices of other precious metals in Australia as well. However, if you want to consider buying silver bullion for a safe investment, you can do so at GoldBullion Australia.
4- Dollar Strength
The U.S. dollar is a leading global currency and it tends to have an inverse relationship with silver prices. People who have stayed active in the silver market for too long know that strong dollar always puts a pressure on prices of silver.
Most of the long-term investors are interested in studying these global factors before they make an investment in any precious metal, including silver. The best thing about investing in silver is that it provides security and its prices are likely to increase in future as well.