What is spot silver?
Spot silver is a trading variety linked to the price of silver in the international market. Spot is mainly relative to futures. It is not a futures contract, but can be withdrawn (that is, physical delivery). Silver processors can buy spot silver. Silver gets the silver raw materials needed for production, but its main significance for ordinary investors is to earn the price difference by buying low and selling high, which is similar to stocks familiar to most investors.
What are the factors that affect spot silver?
(1) The impact of the US dollar exchange rate
Generally, in the spot silver market, there is a rule that when the dollar rises, the price of gold falls, and when the dollar falls, the price of gold rises. A strong dollar generally means that the domestic economic situation in the United States is good, and domestic stocks and bonds in the United States will be sought after by investors. The function of spot silver as a store of value has been weakened; while the decline in the dollar exchange rate is often related to inflation, stock market downturn, etc. The price-preserving function of spot silver is once again reflected. This is because the depreciation of the U.S. dollar is often related to inflation, while the value of spot silver is relatively high. When the depreciation of the U.S. dollar and inflation intensify, it often stimulates the demand for spot silver preservation and speculative growth.
(2) The monetary policy of each country is closely related to the international spot silver price
When a country adopts a loose monetary policy, due to the decline in interest rates, the country’s money supply increases, which increases the possibility of inflation. It will cause the price of spot silver to rise.
(3) The impact of inflation
To this. To do long-term and short-term analysis and is to be combined with the degree of inflation in the short term. In the long run, if the annual inflation rate changes within a normal range, then its impact on price fluctuations will not be large; only in the short term, a sharp rise in prices causes people to panic, and the unit purchasing power of the currency falls. will rise significantly.