Silver is the whitest, most malleable and most conductive metal available, and has been used for centuries for a variety of different things including weapons, jewelry, utensils, machinery, and international commerce.
Silver has been used as a currency worldwide, with many different countries using coins minted from silver. As many economies transitioned to paper banknotes, they were still backed up by silver and gold. In fact, the British pound sterling got its name from the fact that it was supposed to be worth one pound of sterling silver.
The U.S. greenback was also backed by silver and gold. After the Civil War the use of silver was discontinued, and President Nixon ended the gold standard in 1971. This decision led to a strong public demand for gold and silver and a sharp spike in prices. Once the gold and silver backing was removed, demand for these precious metals spiked and their values rose sharply. Investing in precious metals is considered a good way to guard against inflation.
While silver is less rare than gold, it has played a significant role in affecting currencies and has consistently moved in tandem with gold prices.
Factors That Can Influence Silver Prices
- Worldwide production numbers will affect prices. As a precious metal, the price depends on its availability on the market.
- If inflation is on the rise, people will generally hedge their investments in gold and silver. As demand increases, prices will rise along with demand.
- The price of silver tends to be correlated with the price of gold. Trends show that as gold rises and falls, silver does too.
- Silver also has industrial uses in electronics, photography, and the auto industry, among others. Industrial demand for silver can drive up prices as well.
Anyone who wants to trade silver should be aware of the many factors that may influence prices.Trade Silver