Going Rate for an Ounce of Silver

The unit of measure for the purchase and sale of silver is the ounce. What determines the price per ounce of silver, like any other commodity, is simply what two parties can agree upon. The seller is willing to sell their silver at the agreed price believing the price is likely to go down, and the buyer is willing to buy at that price believing the price will be going up. Let’s look at some of the factors which will prove one of them wrong.

One of the biggest factors in the going rate for an ounce of silver is how many ounces are available (supply) to buy versus the need (demand) for silver. The supply is determined by how much silver is being mined, the demand is dependent on the three major uses of silver: industrial, jewelry and silverware, and photography. The silver futures market is affected by how people believe this balance will play out. If demand is more than the supply, the value of an ounce of silver goes down. The price will then go up if the supply is greater than the demand.

The other two major factors in the price of silver are people’s perception of the current news, and how much of the market is controlled by how many people or institutions. As stated above, silver has many uses, so people believe it will always be in high demand. Because of this demand, people see it as a safe investment in poor economic times. When the economy is doing poorly, the price of silver and other precious metals tends to rise. Occasionally, a large percentage of the silver on the market is controlled by very few people or institutions. When this happens, they can control the supply and in turn control the price.