1.Monetary policy and Economical data:
Silver price is influenced greatly by the monetary policies of various central banks in major economies like US, Europe ,Japan, china. In short, we can interpret the influence of interest rate on the gold price as below,
Interest rate (Increases) => Silver price will decrease
Interest rate (Decreases) => Silver price decrease
Because the general public has two ways to save their money and the first way is in money related instrument (FD, Bonds etc) and the other way is to buy precious physical commodities mainly gold and silver. Now if the money related instruments are providing low return because of the lowered interest rate, then the demand for silver will increase and if the interest rate is increased then the demand for silver will get reduced.
And the economic datas which gives insight on the interest rate decisions in future will also influence the price of silver.
2.During global wars and geo political crisis:
During the time of wars and geo political concerns, the price of silver will increase as the hope on the money market instruments get reduced and silver is considered to the safe heaven and alternative to money. And in short we can describe the above situation as,
Global wars and Geo political crisis => Increase in silver price
Inflation indicates the economic growth and expansion and when the economy is growing, the central bank expands the money supply and there by the value of money started decreasing so the investors tend to move towards buying silver and vice versa is also possible.
Inflation => Increase in silver price
Deflation => Decrease in silver price
The silver is mostly quoted and traded in US dollar so the movement of the US dollar will causes price changes in gold.
US Dollar(Appreciation) => Decrease in the silver price
US Dollar(Depreciation) => Increase in the silver price
5.Industrial and investment demand
The industrial demand for silver is very high compared to gold. The silver was used in photographic flims before few years and now it is widely used in solar panels due to its electrical properties and also silver is used widely in manufacturing industries so we must be keeping track of the technologies coming up in the industrial sides to determine the demand for silver.
As the silver is used as a instrument for investing we have to monitor the world economic trend inorderto find the demand for silver and as silver is used for manufacturing coins, any change in government policies causes demand for silver.
1.Production of silver:
The production level of the silver from mines, cost involved also determines the price of the silver in supply side.
Increase in production or decrease in cost => Decrease silver price
Decrease in production or increase in cost => Increase silver price.
2.Recycling of silver:
We know that there is a huge pile of silver flim left waste so it plays a major role in determining the supply of silver in the market and we can get ready amount of silver wastes in the market for recycling from reliable sources which gives us the useful information of the supply in silver.
3.Activities of central banks:
The central banks hold a considerable silver in their reserves so their activities induces supply and demand in the market.