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The Indicators that Drives the Price of Silver


Nobody knows for sure if the price of silver will continue to fall or not though some experts are of the opinion that what is happening now is due to the usual price correction and the effect of the failing world economy. There are many factors responsible for the recent slide in the price of silver and if you are wondering if silver will go up or down in prices, then you need to look at these factors and you can choose your options wisely if the price of silver continues to plummet.

The first is the failing economy which is probably draining investors of investible funds as it is usual for investors to pull money realized from selling stocks and from other sources and buy silver in order to preserve wealth and to make profits. However, if investors have nothing to sell because the stock market is plummeting and they have put all the money they have in buying silver and other precious metals then it is a serious case that could trigger a fall in the price of silver because its supply must have outstripped its demand.

Another factor that gives clues about where the price of silver might be headed is the Commitment of Traders (COT) usually released by the US Commodity Futures Trading Commission (CFTC).  This factor is about the biggest price indicator that helps an investor to know where the price of silver might be headed. The COT shows the value of short and long contracts for silver. When large silver buyers close out their short contract positions, you have to understand that they are hoping for a substantial gain on the long run and you can expect the price of silver to appreciate.


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The Indicators that Drives the Price of Silver

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