Finance 0

Silver Jeweler Demand Falls

By Kurt Osterberg · On May 16, 2016

Silver took a slight dip late last week thanks to recent data with regard to demand from jewelers. However, the price of the precious metal bounced back quickly. Now, there’s one question to be answered. Is this going to send silver tumbling downward? Today, we’ll talk about why lower silver demand from jewelers could really lead the precious metal in any direction, what we saw from the value of silver last week, and how this is likely to open opportunities for binary options traders moving forward. So, let’s get right to it!

Why Weak Demand From Jewelers Could Send The Price Of Silver In Any Direction

When it comes to most commodities, weak demand in any area of the market would generally lead to declines. However, in the case of silver, things are a bit more complex than that because the precious metal is a safe haven investment. Here’s how it could go in either direction…

The Bullish Theory – In theory, weak demand from jewelers could actually be a good thing for silver. I know, at first, it doesn’t make much sense, but it is the truth. The reality is that as a safe haven investment, silver tends to climb in value when market or economic conditions prove to be concerning. In general, when economic conditions are positive, consumers generally purchase more jewelry. So, there is an argument to be made here that follows along these lines. If economic times were positive, more jewelry would be being purchased. So, weak demand for silver from jewelers shows the exact opposite. So, the signal that economic conditions may be stalling again could send safe haven demand up, leading to gains in the value of silver.

The Bearish Theory – The bearish theory on how silver jeweler demand could affect the price of the precious metal is heavily dependent on the law of supply and demand. Essentially, this law dictates that any time demand falls in any sense, the value of the commodity must fall as well in order to keep an even balance between supply and demand. So, this argument states that silver is likely to fall.