With the rising precious metals market, live silver prices are becoming of even greater interest. In comparison to gold, silver is a lot less expensive–but will this continue?

In early February 2011, silver was at just over $30 per ounce. Some analysts suggest this is still great price, and that the valuation is reasonable. That is, some feel it’s still a good deal. But in comparison to gold, the fluctuations in silver prices make it an even more volatile investment.

Before making that judgment though, lots of factors have to be considered. Most importantly, socioeconomic factors influence the cost and valuation of precious metals. And without knowing all the facts, it’s easy to overlook variables that cause an inflated price increase. This is one of many reasons it’s important to do your homework before making a purchase.

Live silver prices can be very useful for trending, but only when taking into consideration what’s going on in the world market, and in the world in general.

Back in 1980, silver prices rose to more than $49 per troy ounce, as a result of what some consider to be market manipulation by Herbert Hunt and Nelson Bunker Hunt. The Hunt brothers basically cornered the market and drove up the price, but changes in trading rules and the formation of the Federal Reserve brought their plans to an end(1,2). In December 2001, it cost just over $4 per troy ounce. Nine years later, in December 2010, it was back to around $30 an ounce(2).

These fluctuations may seem pretty steep, but consider this: back in the early 15th century, it’s estimated that silver passed $800 per ounce, when basing the values on 1998 dollars. New World discovery of major silver deposits brought the value back down(2).

Supply and demand play major roles in terms of the cost of most commodities, but economic fluctuations–and manipulation–especially have great impact on the price of precious metals. When analyzing the market value, live silver prices only give you one piece of the puzzle.