Economic Views of Silver and Gold Prices

Gold and silver are two most precious metals. Price of gold and silver is increasing day by day. Present day’s use of gold and silver are also increasing. Gold and silver are now using as an investment. People understand the value of silver and gold. The main demand for silver and gold was for industrial applications, jewelers, bullion coins and exchange-traded products. Gold barsare the most traditional way of investing in gold.The silver market is not as large in value as the gold market. Though both gold and silver price are increasing, silver’s price are too low than gold’s price. In 1840 price of silver was 1.29 US $/ ozt and price of gold was 20 US $/ ozt. Again 2012 (cum. thru 24 Jun) price of silver was 31.23US $/ ozt and price of gold was 1655 US $/ ozt (reference: Wikipedia). So the ratio of their price varies from 15.5 to 53.0.

Comparison Between Silver and Gold Prices

Gold has been used as money from the starting of trade and has been using as a relative standard for currency equivalents specific over the economic regions or nations till now. Price of gold is increasing so fast and has more than doubled since the recession began in late 2007. Gold futures can make a significant amount of money in a short amount of time. In world economy gold makes a positive effect. Demand of gold is increasing not only the weeding season but all over the year nowadays. Many European countries implemented gold as financial standards but due to World War I they have to temporary suspended it. After World War II United States pegged a system dollar to gold at a fixed rate. Price of gold is increasing by various reasons.

Compared to gold, the silver price is not so high but at present situation silver price is very high for the common people of many poor countries. Price of silver is not increasing at a same level. If we see the previous year’s results the price is sometimes increasing and sometimes decreasing. Usually silver is sold as a premium and the premium is always much higher than the spot market price, the instantaneous price as quoted in some news. Most cases the premiums for silver are about ten percent or much, with extra fees for other issues like shipping and storage as well. As the price of gold is too high for the common people, they are now becoming interested in silver and it makes a positive effect at silver price.

How the Prices of Silver and Gold is Changed in Market

Silver market is not as rich as gold market. There are two types of markets

• Large Traders:

It is the big market for buying and selling gold and silver. It is possible for a large trader to influence the silver price or gold price either positively or negatively. It happened previously and can also happen now.

• Short Selling:

Short selling is consisting of all the buyers over the worlds that are attached with silver or gold business. Price of short selling market is varying from the price of large traders. It is always high as short seller buy silver and gold from large traders.

Please also read Silver And Gold Prices