Silver Price Volatility Outpaces Gold Due to Industrial Demand and Market Size

Silver's price is more volatile than gold due to its strong industrial demand, smaller market size, lower liquidity, and unique supply structure. Unlike gold, silver has a significant portion of its production as a by-product of copper, lead, and zinc mining.

The average daily OTC trading volume for silver over the past five years was $13 billion, compared to gold's $97 billion. This smaller market size makes silver more sensitive to changes in investor flows and economic cycles.

Silver's prices are also affected by its use in industrial applications such as electronics and solar technology production. When manufacturing and industrial investment are strong, demand for silver can increase, but when the economy slows, silver can be negatively impacted.