Price of Silver

The price of silver is a very good indicator of the health of the economy along with the sentiment of investors. The attitude that people have, when changing their money into some other form, such as a stock or commodity, directly affects silver prices. Silver is a safe haven for value.

This means that it has virtually zero risk of losing value in the long term view. On the other hand, stocks are not a safe haven, because they have the possibility of losing all of their value; stocks are risky to own. In a market where sentiments run high and positive, and people feel that everything is on the up-and-up, the risk of owning stocks is less important than the potential profits those stocks might provide. So, when people are feeling positive and hopeful, they buy high risk items. However, when sentiments are are low and defensive, people are afraid of risky items, and they tend to put their money into safe havens to avoid losing value. In this case, the owning of precious metals like silver is very attractive, because silver cannot lose value, but stocks and bonds can. The real value of silver and thus the silver price, adjusted for inflation, stays fairly constant over the decades and centuries, and that is simply because silver is real money and has value inside itself. This value cannot be lost, and so silver is a very safe form to keep one’s money in. Even the US dollar can, and does, lose value. All these truths, taken into account, are why investors will buy silver when the market is down or there is fear of further drops on the market. And when more people move their money into silver, buying it up as much as possible, the good ol’ law of supply and demand comes into effect. This law pushes the price of silver up when larger numbers of people are in a buying mood for safe havens.