Spot Price of Silver: Silver Prices Today

The value of silver is impacted by a number of factors including supply, demand, and market sentiment. The spot price fluctuates daily as traders and investors adjust their holdings but the overall direction of price movement is still driven by supply and demand.

The standard measurement of value is stated and displayed in price per ounce. To be successful investing in precious metals, you must have a thorough understanding of how this complex market works. Whether you are a seasoned silver futures trader or a first-time investor, the following material will help you learn about this important commodity.

How Prices are Determined

The demand side has five core components that influence the total. The largest and fastest growing component is the use in industrial applications. Silver is an excellent conductor of electricity making it highly desirable to the consumer electronics industry. The soft yet strong alloy is ideal for use in the manufacturing of conductors and contacts. The explosive worldwide growth in smartphones and portable devices is currently pushing this category into record territory. This segment grew by over 12% last year and experts predict it will continue to demonstrate accelerating growth for years to come.

Another steady consumer of raw metal is the jewelry industry. The skyrocketing cost of gold has helped to reinvigorate the use of this traditional retail favorite. Although this area saw a brief decline in usage during the height of the recent recession, it has steadily advanced in the period since as developing nations and emerging markets have demonstrated an increasing appetite for the metal.

The third major market participant is the once massive photography industry. This former powerhouse has faced several years of steep declines as consumers have transitioned from the use of film to digital photography. For the first time since this transition began, it seems the decline is leveling off as hobbyists are helping to keep the market for traditional film alive.

One of the oldest uses of the metal and still one of the most active is producing coins. In fact, the first appearance as a form of currency dates back to 610 BC in the ancient Kingdom of Lydia. Even the United States used it as a base metal for coins until 1964 when the U.S. Mint transitioned the last dimes and quarters to less expensive alternative alloys. While many nations have started to move away from the use of silver in official currencies due to rising prices, the growing demand for investment grade coins and bullion has actually led to an overall increase in consumption in recent years.

Finally, the use of the metal as an investment has helped to drive today’s silver prices to the highest level in decades. While investing in commodities and precious metals is certainly not a new concept, the development of silver ETFs and funds has created a noticeable impact in the demand picture for the raw metal. Many of these publicly traded funds such as the iShares Silver Trust (SLV) are backed by holdings of physical silver. Each time an investor purchases a share, the fund must acquire an ounce of the physical metal. When demand from traders and investors increases, it drives silver prices per ounce higher by reducing the amount of supply available to the market. In addition, leveraged funds such as the ProShares Ultra Silver Fund (AGQ) seek to provide traders with 2x the daily performance of the underlying metal. These modern ownership options eliminate some of the traditional hassles and expenses involved with owning precious metals such as storage and security. The arrival of these new funds has made it easier for retail investors to participate in the market without having to buy coins or bullion.

The Influence of Supply on Silver Prices

The metal enters the market primarily from mining production but it can also be influenced by the volume of scrap metal recycling that takes place. Due to the scarcity of naturally occurring silver, production has been slow to increase. In 2010, overall mine production was up by just 2.5% over the previous year. Mexico, China, and Peru are the top three silver producing countries worldwide accounting for nearly 50% of the total global production. The slow growth in supply along with the impact of inflation as demand has continued to accelerate has led to upward pressure on pricing for an extended period. Just ten years ago, the spot price of silver per ounce averaged $4.37 while today, it is hovering near the $30 per ounce level.

Tools and Resources

Whether you have an interest in tracking precious metals as a trader, an individual investment for profit or as a coin collector; this site will give you the tools and information you need to stay informed about current market conditions. Free charts and current price quotes are available to help you stay informed and follow market developments. In addition, traders will find detailed technical analysis and trading strategies designed to offer timely and actionable information.

Recent Market Activity:

May 3rd High: $30.63

May 3rd Low: $29.74

After a brief pullback earlier in the week, silver made a strong move to the upside in morning trading to advance from just below the $39 per ounce mark to over $40 by noon (New York time). Silver futures saw renewed buying interest after a short-lived bout of profit-taking. From a technical standpoint, this can be considered a positive development as the correction tested recently formed levels of support and held nicely. The pullback helped to relieve what was beginning to look like a potential overbought scenario and turned it into a healthy consolidation that has the potential to set up the market for another leg to the upside.

If the price of silver can clear the closing high of around $40.32 from June 17th, the stage could be set for a rapid advance to test the highs put in place during the final week of April. Regardless of whether that occurs ahead of the weekend, prices remain at the highest levels seen during the last 60 days. Commodity chart patterns that demonstrate a gradual move up and out of a base like what has occurred over the last two and a half months have a high historical probability of leading to higher prices in the future.

The biggest question the market needs an answer to over the next week to ten days is how the U.S. and European debt issues will be resolved. There is a growing consensus that a favorable resolution could tip the scales in favor of riskier asset classes like stocks over metals in the short-term. While the exit of safe-haven buyers may lead to a few buying opportunities, there appears to be plenty of uncertainty to keep news bids entering the market on any dips in price. In the event that an agreement cannot be reached prior to the August 2nd deadline, confidence in the financial markets could be shaken for quite some time leading to a major run-up in the price of silver and gold.

On the demand side, the market seems to have priced in somewhat of a hard landing for the economy in China but signs are beginning to emerge that consumption of industrial metals such as gold, silver, and copper is actually increasing.

For now, a continuation of the uptrend appears likely despite the fact that the current silver price puts the one-month gain for the metal at a staggering 8.6% compared to gold which advanced 2.9% during the same time period. Typically, silver will be a leading metal during a commodity bull market and the recent market action may provide some clues as to how the global debt crisis may resolve. The financial markets have historically been an excellent predictor of future economic developments and there are no indications that any deviations from that standard are on the horizon.

Traders looking for an entry point can look for a buy signal to be generated on a close above $40.32. An initial protective stop could be placed below yesterday’s closing low around $39.30. Look for a price target of at least $42.25 on a breakout. Remember, retail traders in the United States are no longer able to trade precious metals on margin so alternative options such as the AGQ (ProShares Ultra Silver) are a great way to participate in the market. Be sure to check current the main page for updated quotes and charts.

Silver spot prices opened the week with a breakout above the last major area of resistance from back in early May. The metal traded as high as $40.70 in the early part of the New York session before backing off slightly. Gold continued to show strength as well as investors rushed to precious metals in the face of growing concern over deteriorating debt problems in the United States and Europe. Gold touched a new record well above $1607 per ounce this morning before taking a slight breather.

While the overall technical pattern in silver looks very favorable for a continuation of the move to the upside, a short term consolidation period can be expected as the market is beginning to look somewhat extended. Relative strength is now moving into overbought territory so perhaps a pullback to test the new support at the breakout point around $39.30 could be in the cards. As long as this new level of support can hold, a rally upward towards the April high near $50 per ounce appears to be likely.

The metals may get a bit of a boost from institutional buyers as banks and larger funds move in to take advantage of artificially suppressed pricing resulting from the forced liquidation of leveraged U.S. retail trading accounts ahead of the Dodd-Frank legislation that took effect on Friday at the close. In addition, many of the traders and investors forced out of leveraged accounts may resume buying through alternative investment vehicles such as bullion, exchange traded funds, and mining stocks. Any activity of this kind could keep bids elevated as traders look to maintain long positions in a trend that appears to be gaining momentum.

Those looking to take a new position may want to consider the area between $39.30 and $39.50 as an attractive entry point. A trade at this level with a protective stop placed just below the May 25th high around $38.86 would provide a limited amount of risk with a very favorable reward ratio if the market rallies off of support and eventually moves higher to test the $50 level. The trend in gold and silver prices remains bullish with both metals currently sitting well above the major moving averages. Remember that a reversion to the mean will occur at some point so it is never a good strategy to chase a commodity when it is extended. Wait for a pullback, and always use your stops to give any trade the best possible chance for success.

The commodity rally was off and running this morning as silver broke out from near-term resistance and soared by more than $2 per ounce to $38.30 by mid-day. The advance originated from right on the 50 day moving average where momentum accelerated and trading activity picked up rapidly. The explosive move to the upside in the spot price came as gold continued to extend an impressive advance that began back on July 1st. The flurry of activity today came as the Fed hinted that further economic stimulus could soon be injected into the market. The dollar slipped by as much as 1% against nearly all major currencies including the troubled Euro which helped to vault commodity prices higher.

Precious metals were strong across the board as gold broke out to a new record high after clearing out the last major area of overhead resistance dating back to the April 30th peak. Gold reached a peak of $1588 per ounce early this morning before retreating slightly in afternoon trading. Analysts who follow commodities and precious metals predicted that eventually silver would have to make a significant move for the recent rally to continue and today it did so in a big way.

Where are prices headed from here?

While gold has now cleared a path to new highs, there is some significant resistance remaining before silver can attempt to challenge the highs put in place during the last week of April. Key short term levels include the area between $38.50 and $38.80 per ounce which represents the closing and intraday highs from May 24th, 25th, and 30th along with the location of the 50 day moving average at the time. It would not be unusual to see some form of consolidation or slight retracement after such a considerable move. If the momentum from the current move will allow this area of resistance can be overcome, the last remaining technical obstacle before a test of the April high would become likely is the $39.25 level where the initial rally off of the low stalled.

For traders looking to initiate a new long position, the area of the 50 day moving average should now act as key support and any pullback towards this level could represent a potential entry point. As always, a carefully placed protective stop somewhere in the area of logical support is highly recommended. More conservative investors may want to wait for further confirmation of what currently appears to be the development of a new uptrend. In that case, waiting for a breakout and a close above $39.25 per ounce might represent a slightly more conservative trading strategy.

Remember that you don’t have to be an active trader to participate in the uptrend in prices. Investment options such as coins or bullion can be a great way to capture growth and price appreciation in precious metals for those who are interested in a longer holding period.