Gold and silver are two closely connected precious metals to the life and culture of Asia. As per recent reports, silver is up over 70% in a year, and experts mention its prices may go higher in the future. Hence, many people are buying silver bullion coins in Singapore.
One question that comes to people’s minds is what affects the price of silver bullion. In this blog post, you will learn about the top factors that affect the price of silver.
Supply and Demand
As per the recent United Nations COMTRADE database, Singapore has been exporting precious metals, pearls, and precious stones to India for a long time. In 2020, Singapore’s export bill reached US$671.67 Million.
The supply and demand equation is essential in the silver bullion price. Silver has many industrial uses like alarm clocks, mobile phones, dishwashers, microwaves, and several other applications.
The actual increase or decrease in supply and demand will move the prices. Events like strikes or interruption of work at silver mines can also move the prices upward. Similarly, the announcement of new products like solar panels will create new demand for this precious metal, and the prices will rise in the short term.
At one point in time, silver was widely used in photography rolls due to its light-sensitive characteristics. However, the arrival of digital cameras made photography rolls obsolete. Today, non-silver photography dominates the field, and there is a large stockpile of old photographic rolls waiting for recycling.
Another factor that affects the prices of silver is as the prices of silver rise, increasing silver items like silver jewellery that come to the market for melting and increasing the supply of silver in the market.
National and Global Economic Trends
Silver and gold have been considered havens for investment. The digital transformation of the business sectors has also changed the way people look at precious metals as an investment.
Start-up entrepreneurs and the younger generation prefer investing in gold and silver through digital gold and silver products. The ongoing process has been positively received by investors globally, and you can see an increase in demand for digital gold and silver products.
When global economic concerns are on the rise, the prices of precious metals like gold and silver rise. The other side of this trend is even a strong, vibrant economy leads to increased demand for precious metals, and you can see investors buying precious metals to safeguard investments.
Inflation is one factor that pushed the prices of precious metals upward. Experts mention inflation reduces the purchasing power of paper currency and investors look towards precious metals as investments that continue to hold their value even in inflation.
As per recent data, Singapore registered average inflation of 0.57 per cent, which was lower than the global inflation average. Experts mention silver can be a great hedge against inflation, and it can provide investors protection from the decreasing power of paper currencies.
Strength of the US Dollar
The US economy and the dollar rate plays an important role in the global economy and precious metal rates. Experts mention the dollar rate has an inverse relationship with the price of silver. A strong dollar price creates pressure on the prices of silver.
These are a few factors that affect the prices of Silver Bullion, and you can know about them through online news resources that are focused on precious metal price movements.