Monday, August 20, 2012
Spot market trading in silver investment
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Spot market trading in silver investment
Spot marketing trading is a very common practice in modern commodities futures and in fact, it is one of the approaches taken in trading silver. Now often there is a price that is quoted in leading markets for silver for immediate transactions and this is what is called the spot price. In many cases in spot market trading, the immediate transaction where the spot price of the commodity is quoted should be executed and finalized within one day or two the latest.
However when spot trading in sliver; there are important things that may influence the quoted price. The main and most significant factor that affects spot market price of silver is its supply and emend among others listed below.
Supply and demand
Supply and demand is the significant factor that may determine the spot market of silver in global markets. Now the world has numerous commodity markets that are trading in silver. The thing is many of them will set a quoted price at the spot market depending on the prices quoted at the COMEX (a section of the New York and London Merchandise regarded as the base of global silver trading) the spot market then will move and vary on an hourly basis depending on supply and demand of the commodity. The trend that is most observed is theoretically proven and as the demand for silver grows the prices do go up. However speculation in the demand and supply of the commodity may also lead to price fluctuation.
Industrial factors such as mines closing and opening
Industrial factors are also very significant in determining the spot market prices of silver. The world has different mining companies dealing with silver and therefore if there have been some industrial factors that will reduce the supply of the commodity; there will be scarcity and therefore high demand leading to price rise. However the important thing in silver investment is the supply to meet the demand. Even if the demand keeps rising and the supply is good, prices will still rise. Political climate on the silver producing nations may also influence the supply chain.
The global economy
The status of the global economy is highly influential in the commodities market not just in silver alone. Silver prices particularly in most markets trading on diverse commodities hardly weather adverse economic climate and are hugely attributed with low gains under such circumstances. So in other words the demand can be there and the supply can be good but again the global economy may in one instance shoot down the demand for silver leading to low prices. Either way trading in the commodities market should be technical and therefore investors should be able to foresee these price variations.
Michael Hastings writes interesting articles at How to Trade Commodities. He gives great advises about gold and silver trading. Read on to find out more.
Spot marketing trading is a very common practice in modern commodities futures and in fact, it is one of the approaches taken in trading silver. Now often there is a price that is quoted in leading markets for silver for immediate transactions and this is what is called the spot price. In many cases in spot market trading, the immediate transaction where the spot price of the commodity is quoted should be executed and finalized within one day or two the latest.
However when spot trading in sliver; there are important things that may influence the quoted price. The main and most significant factor that affects spot market price of silver is its supply and emend among others listed below.
Supply and demand
Supply and demand is the significant factor that may determine the spot market of silver in global markets. Now the world has numerous commodity markets that are trading in silver. The thing is many of them will set a quoted price at the spot market depending on the prices quoted at the COMEX (a section of the New York and London Merchandise regarded as the base of global silver trading) the spot market then will move and vary on an hourly basis depending on supply and demand of the commodity. The trend that is most observed is theoretically proven and as the demand for silver grows the prices do go up. However speculation in the demand and supply of the commodity may also lead to price fluctuation.
Industrial factors such as mines closing and opening
Industrial factors are also very significant in determining the spot market prices of silver. The world has different mining companies dealing with silver and therefore if there have been some industrial factors that will reduce the supply of the commodity; there will be scarcity and therefore high demand leading to price rise. However the important thing in silver investment is the supply to meet the demand. Even if the demand keeps rising and the supply is good, prices will still rise. Political climate on the silver producing nations may also influence the supply chain.
The global economy
The status of the global economy is highly influential in the commodities market not just in silver alone. Silver prices particularly in most markets trading on diverse commodities hardly weather adverse economic climate and are hugely attributed with low gains under such circumstances. So in other words the demand can be there and the supply can be good but again the global economy may in one instance shoot down the demand for silver leading to low prices. Either way trading in the commodities market should be technical and therefore investors should be able to foresee these price variations.
Michael Hastings writes interesting articles at How to Trade Commodities. He gives great advises about gold and silver trading. Read on to find out more.
This post was written by: Franklin Manuel
Franklin Manuel is a professional blogger, web designer and front end web developer. Follow him on Twitter
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