Key Factors Influencing the Silver PriceSILVER (US$/OZ)TVC:SILVERElGatoTradeKey Factors Influencing the Silver Price USDX , SILVER , GOLD The price of silver is influenced by four primary components: 1.The U.S. dollar (USD) 2.The gold price 3.Futures market positioning (open interest) 4.COMEX inventory structure 5.Industrial demand – MISSING- I dont have reliable data - ( If someone have pls share it THX) Silver pricing is not determined by a single variable. It results from the interaction between macroeconomic forces, inter-market relationships, financial positioning, and the physical supply structure. The U.S. Dollar as the Primary Macro Driver Silver is globally priced in U.S. dollars. Therefore, movements in the USD directly affect the nominal price of silver. Over the past year, the U.S. dollar has depreciated by approximately 10 percent. When the dollar weakens, it takes more dollars to purchase the same ounce of silver. In addition, precious metals often become more attractive as a hedge against currency depreciation. This can increase investment demand. The value of the dollar itself is influenced by several factors, including monetary policy, interest rate differentials, expected economic growth, fiscal policy, and political or institutional stability. For example, extraordinary fiscal packages in the European Union and Germany focused on defense and infrastructure, combined with political transition and shifting policy expectations in the United States, have influenced capital flows and currency valuation. Changes in currency valuation feed directly into precious metal pricing. This represents the first structural component of silver price formation. The Gold Price and the Gold–Silver Ratio The second key component is the gold price. Gold and silver are closely linked within the precious metals complex. Historically, gold often leads major price movements, while silver follows with higher volatility. This relationship is commonly measured through the gold–silver ratio, which is calculated as the gold price per ounce divided by the silver price per ounce. The ratio indicates relative valuation. A high ratio suggests silver is relatively undervalued compared to gold. A low ratio suggests silver is relatively expensive relative to gold. In many market cycles, institutional capital first enters gold due to its higher liquidity and reserve asset status. Silver often reacts later and may amplify the move once momentum builds. For this reason, gold can function as both a valuation benchmark and a leading indicator for silver. This is the second structural component.The Futures Market and Open Interest The third component is the futures market. Silver futures trade on exchanges such as CME Group through its COMEX division. A futures contract is a standardized agreement to buy or sell a specified quantity of silver at a predetermined price on a specific future date. The futures market plays a central role in price discovery because it allows leveraged exposure, concentrates speculative positioning, and establishes delivery obligations at contract expiration. Open interest, defined as the total number of outstanding futures contracts, provides insight into market positioning. If price rises together with rising open interest, this typically indicates new long positions entering the market. If price rises while open interest declines, it may suggest short covering. If price falls while open interest increases, this often reflects new short positions entering the market. Futures positioning can amplify underlying macro trends and increase short-term volatility. This represents the third structural component COMEX Inventory StructureThe fourth component is the physical inventory structure within COMEX-approved warehouses. Two categories are especially important. Registered inventory refers to silver that meets exchange standards and is available for delivery against futures contracts. Eligible inventory refers to silver that meets exchange specifications but is not currently registered for delivery. It is stored in approved warehouses and owned by private entities. Eligible silver can technically be converted into registered silver relatively quickly at the warehouse level. However, such changes become publicly visible only after publication in the official COMEX warehouse report, typically released between 23:00 and 01:00 CET (Budapest time). Inventory levels matter because they interact with futures open interest. If registered inventory declines while open interest remains elevated, the ratio of paper claims to deliverable metal increases. This may lead to discussions about potential delivery pressure. However, actual stress occurs only if a significant proportion of contracts stand for physical delivery rather than being rolled forward. This is the fourth structural component. Conclusion Silver pricing emerges from the interaction of currency dynamics, gold’s relative strength, futures positioning, and warehouse inventory classification. Macroeconomic forces influence the dollar. The dollar influences precious metals. Gold often leads directional moves. Futures markets amplify trends through leveraged positioning. Inventory structure conditions the physical delivery mechanism. Understanding silver requires analyzing all four components simultaneously rather than focusing on a single variable.