How Is Silver Priced?
The Price Of Silver
The price of silver price per troy ounce is determined twice daily by a group of United Kingdom based silver bullion investors known as the London Silver Fixing Ltd. This group determines and sets the price of silver per ounce at 10am and 2pm each trading day. The cost of silver is determined by market factors such as supply and demand for silver across the planet. What investors, exchange traded funds, and commodities markets are willing to pay or sell silver for, is what makes for silver pricing. Silver is notoriously volatile in its price and known to change up to 50 cents or more in a given day. Silver is unique in that it has many pulls on it, demand, which causes the silver price per ounce to fluctuate, at times drastically, in any given day. Silver has many industrial uses as well as being regarded as the second largest precious metal for investment purposes, just behind gold, which causes the cost of silver to change frequently. As investors or industrial use increase purchases of silver, the demand goes up sending the silver price per ounce up rapidly. In the same system of supply and demand, when there is little purchasing of silver on the world market, the silver price per ounce drops. When referring to silver pricing, the cost of silver will always be issued in a measurement of a troy ounce, a single 1 ounce metric measurement of weight.
Silver Price Swings
While the London Silver Fixing makes the determination of the cost of silver, there exist elements outside of their control which can take silver pricing out of its normal trading range. There are three significant historical silver price swings which were a direct result of silver trades made on the open market and not the fault of the London Silver Fixing.
In 1973 the Hunt Brothers attempted to buy as much silver as they could creating a false demand and increasing the value of silver to spike at $49.95 per troy ounce in 1980. While an excellent scheme to make some quick money, the federal government stopped them, letting silver price per ounce return to normal.
In 1997 the famous investor Warren Buffet made a whopping purchase of 130,000,00 troy ounces of silver causing demand to increase and temporarily spiking the price of silver.
Finally in April 2006 a silver exchange traded fund was created known as iShares Silver (SLV) and made a purchase of 180 million troy ounces in rapid succession. Once again the cost of silver reacted sharply sending the silver price per ounce through the roof.
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- What Is Silver Trading For Per Ounce?
- What Is Silver Price?
- What Is A Silver Trade Unit?
- What Is The Price Of Silver?
- What Is The Over-The-Counter Silver Market?