Silver is traded around the clock and around the world, including the major global commodity markets of London, Zurich, New York, Chicago and Hong Kong. The London market began trading silver in the 17th century and, to this day, it remains the center of the physical silver trade for most of the world. However, the COMEX division of the New York Mercantile Exchange is the most significant paper contracts trading market for silver. Silver’s spot price – the current price of silver that reflects market variables and expectations – is determined by the COMEX.
Overall, the price of silver is determined by the available supply versus fabrication demand. In recent years, fabrication demand has greatly outpaced mine production forcing market participants to use existing stocks to meet demand. As these available sources continue to decline, silver’s fundamental value continues to strengthen. However, because silver is a tangible asset, and is recognized as a store of value, its price can also be affected by factors like inflation (real or perceived), changing values of paper currencies, and fluctuations in deficits and interest rates.