A Handy Guide to Understanding Silver Prices?

Answer 1

Many people believe that the only price that exists for silver is the price that is mentioned on T.V. or on the internet. This is a false assumption because there are many prices investors and commodities experts use to determine the value of silver on the open market.

One price of silver that is used often is the delivery price of silver.

This price of silver is used to settle silver futures contracts. It represents the amount investors would have to pay to have a certain amount of silver delivered to them at a specific date and time. This price can be different from what investors pay on the open market for silver because the delivery price of silver depends on the value of futures contracts that expire at a certain date and time.

Another price of silver that is used is the "scrap" price of silver.

Some precious metal dealers call this price of silver the "melt" value because it sounds more appealing to some people. Nonetheless, it represents the wholesale price dealers pay for silver that is contained in jewelry, coins, unrefined bars and other items. This price is typically lower than the retail price of silver because precious metal dealers must pay less than the retail price for silver if they wish to remain in business.

One other price that is used to determine the value of silver is the "spot" price.

Most people are familiar with the "spot" price of silver. This is the case because this is the price that is often quoted by media outlets in their financial reports. It represents the regular retail price of silver that investors pay over-the-counter for silver products purchased on the open market.

As you can see, there are several ways to interpret the price of silver.

As a result, be sure to consider the context in which the price of silver is presented. It might just help you avoid much of the confusion that people have about how precious metal experts define the price of silver.