By Admin 
Why Silver Costs Less Than Gold: Both gold and silver are considered precious metals and are used in everything from investment to jewellery. Investors also turn to them as a safe investment option amid market turmoil. Yet when it comes to price, there is a big difference between the two.
Silver looks much cheaper than gold. In such a situation, it becomes important to understand what are the reasons why there is such a difference in the prices of these two metals. Let us know about this…
The market size of silver is small
The market size of silver is considered much smaller than that of gold. According to an estimate, it holds only about 10 percent share of the silver market. There is more investment and trading in gold than in silver.
Due to which it becomes a strong and reliable investment option. This is the reason why people turn more towards gold in uncertain situations. Due to which its price remains high.
Availability and mining of silver is easy
Due to greater availability of silver as compared to gold, there is a difference in prices. Moreover, the method of digging gold is very difficult and expensive, because it is extracted from the depth of the ground through special methods.
At the same time, silver is often found along with other metals like copper, zinc or lead during mining. Due to which its separate cost gets reduced. This is the reason why the price of silver remains lower than gold due to lower production costs.
industrial demand for silver
Silver is used extensively in industries and its demand is directly linked to economic activities. When the economy slows down or global conditions are affected, the demand for silver is affected.
Its prices may come down soon. This is the reason why silver is generally cheaper than gold and there is not much fluctuation in it. However, in the last few days, sharp fluctuations have been seen in the prices of silver.
Impact of central banks’ choices
Most of the central banks of the world keep large quantities of gold in their reserves. Due to which its demand remains constant. Prices also remain high due to central banks holding gold.
On the other hand, silver no longer finds much space in the official reserves of central banks. Due to which its demand is not as strong and it remains cheaper than gold.
Reasons for fluctuations in precious metals
Sharp changes are often seen in the prices of metals like gold and silver. Many external and market related reasons are the reason for this. Changes in economic conditions, worsening of the balance of demand and supply, investors’ thinking and current market conditions, all these things together work to decide their prices.
Besides, prices also go up and down due to taxes imposed by the government. Due to which the prices of these precious metals keep changing.
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