MicaelaRabideau929
Spot price is the price you would have to fork out currently to get the commodity. Therefore, spot cost is basically the 'right now'. Spot price is affected by industry trends and will not operate in isolation. The near future spot price strongly affects a non perishable commodity including silver. An increase in spot price will not necessarily indicate a high need for silver. The silver spot price might be high since the traders predict a boost in the near future. The predictions or perhaps the sentiments with the traders in such cases can be a strong indicator of what to expect inside the silver market.
Silver spot - The near future price is as important as the existing price inside the commodity market. Speculation plays a huge role in this market. This importance exists as it gives suppliers and purchases a hedge against future changes on silver prices. The values on silver are decided beforehand, even before the silver is bought. This is known as an investment contract. A silver commodity contract is surely an agreement to buy a certain quantity of silver at a decided price in a particular time. The silver price decided in the contract remains binding regardless of it rising or falling in the meantime.
The key advantage for suppliers is because they are guaranteed a customer for their commodity with a certain price although of the commodity may rise or fall down the road. The supplier is definite of your sale in this instance. The customer on the other hand is hoping the commodity price will rise. The purchaser can purchase at an affordable price and then sell it at the current high price. He'll then be capable of pocket the difference in the contractual price and also the real.
Your situation is more complicated than this. In reality the investor never really buys anything but usually sells it with a 3rd party. The 3rd party wants anything before it matures. Addititionally there is the 'put' option, which can be really a kind of selling short. This means selling a legal contract before you decide to actually bought it about the assumption that the price will fall. This way you'll be able to buy anything for less money and pocket the main difference between the price you sold it at before owning as well as the actual price you were capable of buy it for.
