Spot prices of silver
As a precious metal, silver is very attractive to investors simply because you can get a lot of it for a price far less than gold. Currently, the spot price of silver is trading at a ratio of 75:1 against gold. However, the price of silver is dependent heavily on supply and demand. The current price of silver is around $16 for a troy ounce. The pundits have been putting out their silver forecast for 2018. According to the current forecasts, silver is expected to rise to $21 per ounce. At price levels of $21 and above, it’s going to start looking bullish, however, at the current rate of $16 up to $21, it is expected to attract a neutral view by investors.
Factors that affect the increase of silver prices
Predictions state that there are a few factors that are likely to impact the prices of silver in 2018. Firstly, there’s the volatility surrounding cryptocurrencies like Bitcoin and Ethereum. In recent months, all cryptocurrencies have witnessed major price swings as governments and banks across the world have clamped down on them.
India’s RBI has banned all banks in the country from allowing any money to be used to purchase virtual currencies. Governments across the world have taken action against cryptocurrencies at certain levels, with China banning all exchanges and Iran putting in place a ban similar to India.
Investors who had pumped money into these virtual currencies in the hope of making quick returns are now pulling out, and precious metals like silver are gaining ground. In addition to all of this, the US dollar is weakening. The weakening of the dollar comes in spite of the US Federal Reserve hitting their inflation target of 2% in March 2018. Other major global macro-economic factors that could affect silver prices in 2018 are Brexit and the trade wars between China and the US.
Rising industrial demand
Industrial demand is another very big factor that is impacting the prices of silver globally. A report by the silver institute forecasts that mine production of silver could fall by 2% in 2018. On the other hand, Peru, a country leading in silver production, announced last year that production fell 12% to 323.1 metric tonnes. The world’s leaders in silver production are Mexico, China, Peru and Russia. On the other hand, demand for silver has gone up hugely. This is mainly industrial demand that seems to be continuously rising. The use of silver in photovoltaic cells in solar panels has witnessed big jumps. In 2016 alone, this demand went up by 34% to 76.6mn ounces up from 57.2mn in the previous year. Also, there is demand from other industries as well. The automobile industry registers a demand of 36mn ounces each year. In fact, the annual demand for silver from all industrial applications is approximately 561.9mn ounces.
Finding the value of a kilo of silver
Of course, the actual value of one kilo of pure silver, otherwise known as fine silver with a purity of 999.9, is determined by its current price per troy ounce. At the current rate of $16.6, or 12.27 GBP per troy ounce, this is the price of 31.10gms. At this rate, the value of one kilo of fine silver is roughly around £394. If the international spot prices rise to $21 for a troy ounce, then one kilo would go up to approximately £500.
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At Physical Gold, our team comprises silver experts who can discuss the current price trends for silver and what to buy and when. Call us on 020 7060 9992 or please email us through our website to get in touch with the team.