Silver Price Today: Down on September 4

Silver is a precious metal that is widely traded by investors. It has historically been used as a store of value and a medium of exchange. Although less popular than gold, traders may turn to silver to diversify their investment portfolio, for its intrinsic value, or as a potential hedge during periods of high inflation. Investors can purchase physical silver, in coins or bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Silver prices can change based on a wide range of factors. Geopolitical instability or fears of a deep recession can cause silver prices to rise due to its safe-haven status, although less so than gold. As a yieldless asset, silver tends to rise at lower interest rates. Movements also depend on how the US dollar (USD) behaves, since the asset is priced in dollars (XAG/USD). A strong dollar tends to keep silver prices at bay, while a weaker dollar is likely to push prices higher. Other factors such as investment demand, mining supply – silver is much more abundant than gold – and recycling rates can also affect prices.

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, because it has one of the highest electrical conductivities of all metals – greater than copper and gold. An increase in demand can cause prices to rise, while a decrease usually causes them to fall. Dynamics in the economies of the US, China and India can also contribute to price volatility: for the US and especially China, their large industrial sectors use silver in various processes; in India, consumer demand for the precious metal for jewellery also plays a major role in setting prices.

Silver prices tend to follow the movements of gold. When gold prices rise, silver tends to follow, since their status as safe haven assets is similar. The gold/silver ratio, which indicates the number of ounces of silver needed to equal one ounce of gold, can help determine the relative valuation of the two metals. Some investors may view a high ratio as an indicator that silver is undervalued or gold is overvalued. Conversely, a low ratio may suggest that gold is undervalued relative to silver.