In the last couple of years, silver’s market has been characterized by huge fluctuations in price. This has caught the attention of traders as well as investors, with the metal showing potential for growth and exceptional resilience.
Historically, the metal has seen dramatic spikes in its price, with its best price being roughly $50 an ounce. This was recorded in 1980. Even after corrections, silver has maintained a strong position, with its price remaining above $20 an ounce. This volatility presents both opportunities and challenges for those interested in trading this precious metal.
In 2020, the price of this precious metal rose to almost $30 an ounce, a figure not seen since 2013. Some believe that surpassing this level may cause its price to appreciate even further and increase interest from investors.
In order to make informed investment decisions, it is important that one understands the factors that drive the metal’s price movements.
So, what factors influence the price of silver?
The metal’s value is imputed by various economic, technological and geopolitical factors. Political instability, trade tensions and global uncertainties cause spikes in demand for safe-haven assets such as silver, which in turn causes the price to increase.
Monetary policy also plays a crucial role in the metal’s price movements. The implementation of loose monetary policies by central banks often causes an increase in demand for precious metals, which are used as a hedge against possible inflation. The industrial demand for silver also affects the metal’s price. This is primarily because the metal has many industrial applications, including in medical devices, solar panels and electronics. The demand for the metal is expected to increase as emerging tech continues evolving, which may also increase its price.
In addition, supply dynamics play a role in the price movements of silver. Recycling rates and mining yields influence the available supply of the metal. Any changes or disruptions in these areas have huge effects on the metal’s price.
Some analysts and experts in the industry have made bold predictions for the metal’s future, with some expecting the price to hit $100 an ounce. Primary factors that could drive silver’s price to this new high include a possible supply deficit. With the metal’s industrial demand increasing and mine production finding it hard to keep up, some analysts forecast a huge shortfall in the metal’s supply. This may cause its price to increase greatly as buyers compete for the available silver.
Fears of currency devaluation and concerns of inflation are also contributing to bullish predictions for the metal. These bullish sentiments put exploration companies such as Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) with interests in silver mine development in a good position to attract more investor interest over the coming years.
NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF
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