Gold Price Down, How It Affects the Silver Dollar

How much silver is in a silver dollar – Gold Price Down, How It Affects the Silver Dollar


Many investors are saying that the silver dollar will not pass the $21 mark this year, due to the fall of gold price and big drop on demand of silver bars and coins.

According to some professional commodities trader, if the silver ETF holders start to liquidation on their silver like what they did with gold, there would be a further fall on the silver price. And one of the main causes for the silver dollar to fall is the low demand from the industrial users and financial crisis in European countries.

Based on their analysis, the Silver Dollar should go up only in year 2014, lead by the global economy improvement with increase in industries demand and strengthen in dollar. Weak demand on solar-panel from European countries will also constrain the growth on silver dollar

For people who are into investment, gold is the main thing that they are using. However, silver is also very important when it comes to investment. It may not have that high value that gold has but it is certainly part of the revolving economy. Thousands of years ago, according to history, silver is also being used as a form of money. But there came a time when it is no longer seen as a legal tender especially to those first world countries like United States of America.

According to records, the silver reserves of silver all around the world has reached 530,000 tons. This is low compared to gold but it should not be interpreted that it is not really that important. There are different industries that are still dependent on silver. In this article, you will be learning the effect of the gold price to that of the silver dollar.

When the dollar weakens, the value of gold is affected. It is like a domino effect. Gold and the dollar are fully dependent and it is impossible not to see changes on both if there is a great change on the other. To set an example, let us try to look at the value of dollar and gold on May 8, 2013. The weakening of dollar has caused +0.40 change to the value of gold and the normal trading is affected with a -3.30 change. If you are going to look at the total amount of change that was incurred to the value of gold, it is almost -2.90. This will let you realize the effect of dollar on gold.

Now, let us try to look at the changes on the silver dollar because of the great change on the gold dollar. On the same date, the changes on silver are also recorded. The weakening of USD only incurred +0.01 change on the value of silver. On its normal trading, only +0.17 was recorded for the change. For its total change, it is only affect by +0.18. If you are going to look at the discrepancy on the changes between the gold and the silver value, it is safe to say that the silver dollar is not fully dependent of gold dollar. No matter how great the fall of the value of gold, it would not be giving a great impact on silver dollar because this is not a legal tender. Compared to gold, silver does not really have a great value and it can surpass the changes that can be brought by the changes in gold and the dollar.

The fact given above about the changes in gold and silver is actually determined by the smaller vale of silver in the market. It is also generating smaller amount each year. The demand and the investors can affect the price of silver dollar. If there is a great demand and there are many investors who are willing to make an investment, its value will also be higher in the market.

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