5 Factors That Influence Silver Prices – Trading Strategies for Beginners

Precious metal investment has always been a favourite for investors, and silver’s price trends have always been volatile. The factors affecting silver prices are similar to those affecting gold, such as the US dollar’s exchange rate, inflation, Central bank interest rate decisions, crude oil price trends, and the stock market’s performance. 

  1. The US dollar’s exchange rate impacts silver’s price trends. 

The price of silver is closely related to the supply and demand relationship and the U.S. dollar’s pricing. From a medium and long-term perspective, the U.S. dollar’s fluctuations have a relatively large impact on silver. The price of silver and the exchange rate trends of the U.S. dollar usually maintain a negative correlation. Hence, the U.S. dollar’s exchange rate is one of the important factors affecting silver’s price trends.

  1. The impact of U.S. non-farm employment data on silver’s price trends. If the number of non-farm jobs rises, the price of silver will fall; conversely, if the number of non-farm jobs declines, the price of silver will rise.


  1. The impact of each country’s monetary policy is closely related to the rise and fall of silver prices. When a country adopts a loose monetary policy, it tends to increase the country’s money supply. As interest rates fall, the country’s money supply will surge, increasing silver prices. Investors should focus on market news in countries that use a lot of silver to get the latest information and announcements. 
  2. International political turmoil and wars always have an impact on silver price trends, and major political events or wars in the world will also have an impact on silver prices. During wars, government’s will direct significant resources towards winning the war, while ignoring development spending, negatively affecting the domestic economy. In such cases, a large number of investors would choose to accumulate spot silver for asset preservation, which tends to expand the demand for silver and stimulate rising silver prices.
  3. The supply-demand for silver has an impact on silver prices. If the output of silver increases significantly, the price of silver will be affected and start falling. Conversely, if the amounts of silver produced shrink, silver prices will increase in value when supply falls short of demand.

What factors in silver investment have led to constant losses?

In the process of investing in silver, many investors complain that they always lose money, so why do investors fail to make a profit? What are the reasons behind their losses? These are issues that investors are quite concerned about. 


  1. Not managing their funds properly 

The losing investors do not have proper risk management and trading strategies to safeguard their capital. Many investors still stick to their losing positions and fail to use stop-loss orders even when the market has deviated from its initial plan. In addition, many investors trade on margin, which means that they can control positions larger than their account balance. While margin trading can boost their profits, it can also lead to massive losses if the investor is not careful. Again, investors should properly manage their risk exposure to limit their losses.  

  1. Not using a stop-loss order 

Most investors know that they should use a stop-loss order on all their trades, but many do not do so. Investors who do not use stop-loss orders regularly believe that they can closely monitor their trades to ensure they do not incur huge losses. However, sudden market movements could leave them nursing massive losses, maybe even having their accounts wiped out. Many investors also tend to adjust their stop-loss orders once a trade starts going against them leading to larger losses than they had initially planned. Once they have lost more money than they planned to, they will become overwhelmed. Therefore, investors must always adhere to their trading plans, especially when it comes to risk management. 

  1. Lack of patience

Some investors can’t wait to enter the market when the price is most likely to move in a beneficial direction. Many investors suffer from the desire to get rich quickly. However, the probability of getting rich quickly from trading is relatively minimal. In most cases, after entering the market, many investors find that the price tends to move in the opposite direction, testing their patience. However, if you did your analysis right and entered the markets in accordance with your trading plan, all you have to do is sit tight and wait for the trade to play out. However, not all trades will work out in your favour despite following the proper steps, which is just how the markets work. 


In summary, don’t offer to enter the market without saying that silver investment can make a substantial profit. Although speculation in silver is a relatively stable investment method, silver investment also has high risks. Therefore, make sure you have a solid plan before trading or investing in silver. You should constantly work on your trading psychology to become a consistently profitable silver trader. Not all your trades will be winners and you have to make peace with this fact since that is how markets operate. Only by continuous growth can you make better profits.

Open a trading account and start to trade silver now!

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