The Reasons for Rising and Stabilizing of Silver Prices

Silver Prices

Silver coins are largely used as a means of facilitating trade and storing wealth. Investing in silver is not as straightforward as it may look outwardly, as one has to understand the basis of its demand and supply.

Silver prices can be volatile at times, although its long-term stability makes it a safe-haven asset for most investors. In times of inflation and economic uncertainty, silver is one of the best assets for hedging.

This article will highlight the major reasons why silver prices continue to stabilize regardless of modern-day market sophistication.

The Value of Scarcity

Silver demand is directly correlated to economic growth. Since silver is highly used in the manufacturing sector, its price is affected by any government regulation that affects the consumer purchasing power.

Most countries are currently recording high per capita incomes, better balance of payments, and more technology absorption amongst their people. Industrially, there is more production, which consequently leads to more silver consumption.

Silver, like any rare and precious metal, is of limited supply in the world mining deposits. Therefore, the little silver that is available will be highly valued and its prices continue to rise steadily.

Precious metals are easy to convert, such that you can get cash for silver in Rochester MI immediately after the sale. However, most traders are preferring to hold on their silver commodities as they anticipate future price increases as a result of anticipated silver shortages.

Political Instability and Pandemics

Unstable political environment has a direct impact in the country’s currency value. Currently, the dollar continues to lose value against precious metals such as silver and gold. From a macroeconomic standpoint, most countries are offloading their dollar reserves while preferring gold or local currencies for business transactions and store of value.

Monetary currencies are assigned value by people’s utmost faith in them, and in times of political tensions, currency value takes a nose dive. Consequently, investors turn to more universally accepted asset classes such as silver.

In times of pandemics, investors’ behavior changes are evident. At the height of the COVID-19 pandemic, prices of commodities such as oil took drastic falls due to low demand caused by country lockdowns. On the contrary, gold and silver were making ALHs (All-Time Highs) every other week.

An increase in social, political, and economic unpredictability has made investors turn to precious metals to preserve their wealth value. Most investors’ opinion is that the precious metal prices will continue to shoot up, at least for the next few quarters.

Inflation and Economic Depressions

Every investor who has experienced past economic depression can attest to the level of bankruptcy and asset devaluation experienced. House owners are the worst hit during an economic depression since inflation rates supersede interest rates with great margins.

As established earlier, silver and other precious metals are limited in supply. When the government prints paper money (IOUs) without equal backing in gold and silver reserves, inflation is created, reducing the purchasing power of money. For silver and gold, prices have to remain stable in order to keep up with the economy’s paper money supply. This means that for the same weight you initially bought, you will get more cash for silver in Rochester MI.

Investors trading forex and stocks understand the when to buy or dispose the assets on their portfolio. Irresponsible trading activities that drive stocks and forex prices up contribute to a large percentage to economic depression.

Precious metals’ ability to retail their value even in times of economic turbulence continue to be attractive to investors. Since inflation seams inevitable especially in the world’s greatest economies, there is a strong belief that silver prices will continue to be on the rise.


The investment world is sophisticated. Therefore, you require a lot of research to gain investment knowledge that will help you make money in the modern markets. The best time to start investing in precious metals is now, as the market is expected to remain bullish.

Disclaimer: The information shared in this article is not financial advice but primarily for informational and educational purposes.

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