Commodities : Silver
Silver demand :
Silver is part of the precious metals category. It has several uses:
- Jewelry: Silver is used for making jewelry
- Industrial: Silver is used in electronics and electricity because it has the best electrical conductivity
- Photography: Silver is used for making silver films but this sector is shrinking with the advent of digital.
- Currency: Silver is used to create coins or store by investors.
Silver supply :
Now take a look to the production. Silver has two sources of production, mineral reserves with about 19,700 tons / year and the recycled silver, 5600 tons / year for a total of 25,300 tons / year. You should know that silver is not necessarily extracted from mines where it is the main metal (which represents only 32% of mine production), silver can also come from gold mines, zinc or copper.
Silver Evolution :
The price of silver is depending on adjustments of supply and demand. You must then pay attention to the following numbers: the mining, industrial needs and artistic production of silver issuing from recycling.
The Silver is listed in ounces of silver in U.S. dollars. The evolution of the price is correlated with the dollar. The price of silver is rising as the dollar felt. This is called negative correlation between the dollar and the silver which is illustrated perfectly with these two charts of the EUR / USD and silver.
Finally, as a precious material, it also acts as a safe haven. In periods of economic crisis or war its value will rise sharply because of inflation and a flight to quality flows. We can still challenge the notion of safe haven given the high volatility due to short-term speculation. This makes therefore a very risky asset although it is not entered in the collective thought due to media especially. So there are speculative purchases and sales based on monetary uncertainty.