Metals are known as aluminum, cobalt, nickel, copper, zinc, silver, tantalum, tungsten, platinum, gold, and lead. More metal varieties may also available in the market. Of all these metals, gold, silver, aluminum, and platinum are ranked as precious metals or the rarest forms of metals. Since they are rare, their metal prices are higher than other metal types.
Metals have many uses. They are used, for example, in the construction of concrete barriers, foundation of buildings, and other infrastructure purposes. Metals may also be used as part of a jewelry or furniture. These uses of metal imply the reasons why certain types of metals that are highly in demand in today's market. As with other commodity prices, metal prices are also highly influenced by the concept of supply and demand. This being said, rarer forms of metal usually have more expensive metal prices.
How Metal Prices Are Determined
Metal prices may surge or fall based on several metal prices indicators. Listed below are just basic examples of what affect the movement in metal prices:
- Rarity of the metal. If the metal is very rare, then most probably, its metal prices are going to be one of the highest in the market. This is true for gold, silver, and platinum. Generally, those classified under precious metals have higher price tags attached to them. With limited number of supplies, metal prices may go up.
- Demand. Metal types that are highly demand may also be more expensive compared to other metal prices. This is because certain metal types are used in production, building, or construction in some industries. Other metal types, such as gold, may also be considered an investment. Demand may dictate movement in metal prices.
- Mining Operations. Mining operations are good ways to discover certain metal types such as gold and other minerals. Weather conditions and other factors that directly affect mining or underground surveys may limit the supply for certain metal types. Hence, mining operations may directly affect certain metal prices.
- Price of Other Commodities. Commodity prices may influence changes in metal prices. Take for instance the rising oil prices. Oil is used in transportation and as an energy source for some equipment or machineries used in mining. With rising oil or fuel prices, additional cost on operation may also result in higher metal prices.
- Market Conditions. Interest rates and tax requirements may cause metal prices to drop or rise. Aside from these economic indicators, performance of industries that use metals in their operations can also be one of the many factors determining metal prices.