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What Moves the Silver Futures Prices?

silver price study

Recently, silver futures prices has remarkably witnessed a steep rise, which is expected to explode even further.

Precious metals have always been in demand for various reasons. While the ornaments made of precious metals such as gold and silver were very much in use long ago, now, most of us buy them with the intention of future investment.

Looking into future prospects, gold and other essential commodities have already broken all the expected records of any common man due to which, people are now diverted towards investing in silver.

Increase of Silver Futures Prices

The silver futures prices are rising because of the increasing investors’ demand, which is ultimately leading to a shortage of this commodity. Unlike any other precious metals such as gold, industrial silver used in electronics, medical applications and solar panels are non-recyclable which has even aggravated the demand manifolds.

The silver futures prices remained unaffected until investors focused on the economy rather than inflation, but now with things changing rapidly; manufacturers are ready to pay for the silver used in their products, which cannot be recycled or reused. This is one of the reasons why silver prices have reached the sky in 2011.

silver point and figure chart

Decrease of Silver Futures Prices

Many of the giant investors such as JP Morgan and HSBC are considered the short sellers of silver while the price of silver is held down due to the undue exploitation of exchanges such as COMEX and NYMEX. Secondly, the short sellers are holding the price of silver illegally to balance the demand in the market.

Growing Demand for Silver

As a matter of fact, once gold has become out of bounds for the common man, he turns to silver. During hard times, silver jewelry and silver wares have replaced gold and other metals. As a long-term approach, the market looks very prosperous for silver investors, as the metal used in the industries will drive up the prices.

Moreover, the companies and industries using silver for their production cannot get by without buying silver, as it is one of the major raw materials that they use. Other factors that affect silver prices are the bullish and bearish markets, surging inflation and economic imbalances.

Amongst the four major metals, the year 2011 has seen a 74% hike in silver prices, which makes it the second best performing metal after palladium.

Daily Silver Prices (COMEX)

Major Silver Producing Countries

As per the records of 2006, the three major silver producers in the world were Peru (with 111.6 million ounces of silver), Mexico (with 96.4 million ounces of silver) and China (with 75.4 million ounces of silver).

It was not more than three years ago when silver futures price was so low that anyone could easily afford to buy a few grams. With no pre information, the prices have soared up to 385% in value. The year 2011 alone has seen a hike of $49.21 per ounce, which means double the value.

Silver Futures Prices Surprised The Unprepared

We have already seen how good gold is as an investment. Now the same applies for silver. Nevertheless, it is a fact that silver futures prices are unpredictable. Just keeping a watch over the market and silver news can help you make good money on the metal. However, one has to be careful, as the silver market can crash in the event of an economic downfall, as it is used as a major raw material in industries.

In such cases, silver investors are more likely to suffer than gold investors. Certainly, silver futures prices hold many surprises for the unprepared.

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