Why Silver Prices are Going Up

Silver prices are continuously making new highs and are at 30 years high also silver as an asset class is outperforming all other asset classes like equity, real estate or gold, therefore the questions arises why the prices of silver are going high. Given below are some of the reasons due to which silver prices are rising –

  1. Silver has more industrial applications than any other metal and therefore its demand for silver has been rising constantly, silver is also being put to several new uses by the company’s across the globe giving further boost to its demand.
  2. Another reason behind silver rally is the supply side issue, where the supply of silver is not matching its demand and also silver can’t be recycled as it is used in small quantities.
  3. Due to quantitative easing and liberal monetary policy adopted by many countries there is huge liquidity in the market which also is one of the reasons behind the rally in silver prices.
  4. With growing number of exchange traded funds which are on the constant lookout for opportunities, and since silver is outperforming other asset class these funds are chasing it thereby pushing the price of this white metal.
  5. Since silver is traded in huge quantities in commodities market there are many short positions in silver and that is another reason for this steep rise in the prices of silver.

Whether the price of silver will rise or fall from here only time will tell but one thing is certain that whoever bought silver in the past few months have made returns between 20 to 50 percent and when an asset class generate that sort of returns it is bound to be favorite among investors or traders as long as the prices keep rising.

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