Supply and demand are the most obvious general factors influencing commodities markets. Projected motion of supply and demand in relationship to each other fuels speculation in these markets, but market drivers for gold and silver are more varied and complex.
People buy precious metals not to make money, but because they already have it. Precious metals never constitute a liability, since they cannot be created at will. Banks, knowing their currency is subject to improper management, also have certainty that they must hold precious metals reserves.
Gold and silver are maverick assets, notoriously difficult to manage. To be sure, the uses for silver and gold are many and varied, but these have little to do with reasons people currently invest. The trust and confidence that people place in precious metals lie in the knowledge that they are real money, and consequently less vulnerable to the gamesmanship of paper financial markets.
