What factors affect silver price: 1. Silver production Silver is also based on supply and demand.
When silver production increases dramatically, silver prices naturally fall back.
But if a mining company or smelting company has a decline in production, the silver price will naturally rise.
2. The dollar is considered the world’s currency, and while the dollar’s value is not comparable to silver’s, its liquidity is not.
But the dollar is a government-issued currency, and when there is international political tension, people lose faith in the government’s currency and invest in silver, which is safer. In this way, the dollar will deteriorate and silver will rise.
In simple terms, silver is weak when the dollar is strong, and silver is weak when the dollar is strong.
3. Inflation The purchasing power of a country’s currency is determined on the basis of price indices.
When a country’s prices are stable, the buying power of its currency is more stable.
On the contrary, the higher the inflation rate, the less purchasing power a currency has and the less attractive it becomes.
If price indices in the US and other major parts of the world are stable, holding cash will not depreciate, and the interest income will be the first choice for investors.
On the other hand, if inflation rises sharply, there is no guarantee of holding cash, and interest rates cannot keep up with rising prices.
People would buy silver because the theoretical price of silver would go up with inflation.
4. The central bank will earn no interest on its investment in silver, and the profit on its investment will depend solely on the rising price.
When central bank interest rates are low, silver has a measurable benefit.
But when central-bank interest rates rise, people will be charged more to hold dollars, and the value of non-interest-paying silver investments will fall.
5. Industrial demand Silver has an industrial nature, with significant industrial demand in PV, electronics, renewable energy and healthcare.