What is Driving the Silver Price in 2016?

Silver prices are on the rise and the increase has been outperforming even the rise in the prices of gold. During the first quarter of 2016, the silver prices went up by 27%. The following factors will continue to drive the prices of silver in the upcoming months.silver price
1. Silver’s Usage in the Competitive Renewable Energy Market

By being part of the components used in the water purification systems, the demand for silver has increased in many manufacturing industries. Most people are unaware that silver is an integral component of the photovoltaic (PV) cells which are used in solar panels and are responsible to convert light energy to electricity. The conductive qualities of silver improve the overall quality of the energy collected from the sunlight. This implies that with the passage of time, the demand of silver will only skyrocket. It is projected that 70 million ounces of silver will be used by the solar energy sector in 2016 which will automatically translate into higher silver prices.

2. Silver as a Safe Haven

Precious metals like gold and silver are thought to be safe haven investments. This basically means that even in a turbulent market scenario, these metals are expected to retain their value. Investors visualize safe haven investments as an ideal way to minimize their losses in cases of unanticipated market instability as insurance. Therefore, in cases where you have to protect your money from inflation and do not want to suffer a set back from the loss of purchasing power, turning towards precious metals is your best resort. The valuation of silver is on the rise because of the safe haven charm which will continue to increase its demand in 2016.

3. Increase in the Sales of Silver Jewellery

The sales of silver jewelleries are increasing at a very rapid pace. The high supply and demand rates for silver jewellery will prove to be advantageous for investors in anticipation of the increasing silver prices in 2016.

4. Demand for the White Metal as a Bullion

The silver bullion’s demand has increased in the last few months. The hard and tangible asset has been soaring in demand in the Australian markets since last year. According to Gold Bullion Australia, during the first quarter of 2016, there was a 165% increase in silver sales in Australia with respect to an increase from the first quarter of last year. Additionally, consumer demand for silver bullion has also been growing in other parts of the world like the United States. So, if you are looking for investment opportunities, choosing Silver American Eagles is a great option. To date, there has been a 10% increase in the silver coin sales from July of last year.

5. Silver and Gold Ratio

The ratio determines the ounces of silver required to procure one ounce of gold. This is an important factor to pay attention to in order to understand the driving factors behind the price of silver. As the gold to silver ratio continues to decline, silver prices are expected to soar in 2016.