Silver prices, Industry overview:
The high demand for silver is largely down due to its varied industrial uses, with just over half the annual trade of the precious metal accountable to multiple industries. It’s malleability and physical strength means that it can be used in anything from LED chips, alloys, and nuclear reactors to medicine, dentistry, and water purification.
The other half of the silver market is largely dedicated to jewellery and investment in silver coins and bars. As such a high proportion of silver goes to industry (in comparison to around 10-15% of gold), its value tends to be more erratic than that of gold, as the various global economies greatly affect its demand.
Despite the volatile nature of its value, silver is still a highly sought after precious metal, that can be trusted as a long-term wealth investment. Like gold, it is bought and sold in over-the-counter trading (OTC) via a dealer network, as opposed to a centralized exchange.
The London Bullion Market Association (LBMA)
The true benchmark silver pricing is set by IBA, who is responsible for the administration and governance of the London Bullion Market Association (LBMA) Silver price, which is set in US dollars per troy ounce. Whilst sterling and euro prices are also made available, they are indicative prices for the purpose of settlement only.
Silver coins and bars
Physical silver is largely traded in either bars or coins, with bullion coins usually attracting a higher price tag, due to their higher manufacturing costs and appeal to collectors. Collectable coins have been minted to celebrate everything from Marvel Comics to Star Wars.
Silver coins are minted in various countries around the globe, but most tend to originate in the UK, Australia, the US, Canada, China, and South Africa. The most popular and widely traded coin is the Canadian Silver Maple, whose weight, purity and content are guaranteed by the Canadian government.
Other famous silver coins include Silver American Eagle, the Silver Chinese Panda and the Krugerrand silver coin. In terms of weight, the most common silver coins are minted in 1oz, 2oz and kilo sizes. Silver bullion bars are available as parts of an ounce, multiples of one troy ounce, grams, or kilograms, and again as parts or multiples of these units of weight.
Monitoring silver price charts
The StoneX Bullion Silver Price Chart can be used to view the historic price of silver, with the data available to view in six timeframes; 1 month, 3 months, 6 months Year to Date (YTD), 1 year, and 5 years. Prices are available in grams, kilo, or ounces, allowing you to view the price you need in the timeframe of your choice, which allows you to analyse historic data to aid your investment decision.
What can impact the price of silver?
Much like gold and other precious metals, silver is very much a supply and demand commodity. As close to half of it is in demand from various industries, its value can fluctuate quite wildly, with sharper rises and falls than other metals. Here are some of the main factors which can determine the price of silver:
In times of economic prosperity, high demand for jewellery containing precious metals such as silver tends to increase, and when the economy is hit by turmoil then purchases tend to drop. However, even in times of financial crises, there is still always a market for luxury items that contain silver, and the same can be said for other industries that utilise it.
New technologies can influence the demand for silver, and some industries utilise physical characteristics which are yet to be found in any other metal. That said, industries are always looking for cheaper alternatives to silver and advancements in technology is helping to find these replacements in some instances.
Inflation can have a negative impact on a wide range of investments, such as stocks, shares or cash. Silver on the other hand, much like gold, can often hold its value in times when inflation has devalued other investments, just like gold. So, this is where the precious metal can provide some stability in an otherwise weakened portfolio.
How to invest in silver
Here at StoneX Bullion, we are firm believers in silver as an asset to anyone wanting to build a diverse portfolio, rather than one built up solely of stocks and shares or property, for example. However, we understand the importance of making sound decisions based upon your individual circumstances. If you are considering investing in silver, please get in touch and we will do what we can to address your questions or concerns.