Factors affecting silver and gold supply and demand differ greatly from one another. Modern demand for gold is only maintained as long as the gold supply remains rigid. The fact that gold is not consumed makes it an ideal vehicle for wealth preservation. The price of gold is driven by debt. This fact makes the forces that drive its market movement different from that of all other metals.
By contrast, silver price drivers are continually changing, due to its value as both a monetary and an industrial metal. Silver prices typically move in tandem with gold, but the price sensitivity of silver has become much less than it has been historically. Although the general state of global economies still affects silver, burgeoning industrial demand insures that silver is consumed. As a result, demand remains strong for industrial silver, even as world economies strengthen.
Silver, unlike gold is not hoarded in central bank vaults, as a hedge against worsening fiscal conditions. It is, however, a finite resource that can preserve wealth for those who cannot afford to trade their paper dollars for gold.
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