Colloquially referred to as the “white metal,” silver is renowned for its beauty and numismatic value. For thousands of years, humans treasured silver in the form of jewelry, coins, and silverware. In the modern economy, silver is an essential component in nearly every industry included but not limited to solar energy, medicine, chips, touch screens, batteries to automotive industry. If you are interested in investing silver or if you are interested in investment metals, you’ll be pleased to know just how much demand there is for silver these days.
Commodity Analysis: Silver
Silver is classified under the atomic symbol Ag. Although it is not a chemically active metal, sulfuric acid and nitric acid do erode silver. It is stable in water and moderately toxic. That said, some silver salts can be lethal if enough is ingested. When liquidated or vaporized, silver is an extreme irritant and may cause long-term damage or death.
Silver vs. Other Metals
Silver is shiny. This is perhaps its most striking feature and the factor that most distinguishes it from other metals (at least until the electronic age). No other naturally occurring element reflects visible light as well as silver, according to the Royal Society of Chemistry. This is why early human ancestors often used silver as a mirror.
Unfortunately, silver can tarnish over time if not maintained. Humans have much more functional and cheaper mirrors today, making true sterling silver mirrors something of a rarity. Luckily, this frees up silver for other and arguably more important uses.
Other metallic properties of silver:
- Like gold, silver resists oxidation and corrosion—albeit not quite as effectively as gold.
- Silver conducts heat and electricity better than all other metals, which makes it ideal for electrical products.
- Silver is non-toxic and even helps kill microbes and bacteria.
- No other metal is as “photosensitive” as silver.
- Silver is much, much more abundant than gold, which makes it a cheaper and more accessible alternative.
How Much Silver Is There?
Most estimates put world production of silver at 20,000 metric tons (tonnes) per year.
Silver Demand in the Modern Industrial World
Through the first several decades of the 20th century, silver demand grew from approximately 100 million ounces per year to more than 400 million. This coincided with the rise of indoor plumbing, electricity, and automobiles. By the mid-1900s, however, silver saw a wane in industrial demand as producers became more efficient, and environmental standards slowed industrial growth in developing areas.
Thanks to the meteoric rise of the middle class in China and India, among others, silver usage experienced a resurgence by the mid-2000s. By 2012 to 2013, silver demand was more than 650 million ounces.
Silver, as with gold, demonstrates remarkable flexibility and diversity of use and form. Quoting from geology.com:
“Silver can be ground into powder, turned into paste, shaved into flakes, converted into a salt, alloyed with other metals, flattened into printable sheets, drawn into wires, suspended as a colloid, or even employed as a catalyst. These qualities ensure that silver will continue to shine in the industrial arena, while its long history in coinage and jewelry will sustain its status as a symbol of wealth and prestige.”
Silver’s biggest industrial demands come from electrical wires and other electronics. Among other items, you can find silver in alarm clocks, door handles, speaker wires, circuit boards, solar panels, batteries, and pressurized nuclear reactors.
Silver also has a wide application in the medical field. Silver-coated foley catheters can prevent tract infections. Radiologists rely on silver halides when taking x-rays. Silver can help prevent infection or infectious growth in bandages, dressings, implants, and prosthetic limbs. There are silver needles, sutures, and silver fillings to prevent cavities. In fact, many hospitals even use a silver membrane to filter water out of their taps. (You can read more at The Silver Institute.)
In 2016, demand for silver hit a record high. Much of the new demand comes from India and Thailand, although North America did see a 5% year-over-year increase. There were also notable leaps in Chinese solar panel production, which can be silver-intensive, as well as industrial demands in Japan. There has also been a sharp rise in demand for silver bullion as an investment asset since the Great Recession of 2007-08.
Silver Bullion as an Investment Asset
Gold remains the most popular precious metal for commodity investing, both in the United States and internationally. Silver is the second most popular investment metal, and it is particularly popular for Self-Directed IRA inclusion.
Because silver, a universally recognized symbol of wealth and value, protect investors from inflation of fiat currencies the U.S. government still doesn’t allow economic transactions to take place with silver as a medium of exchange.
The good news is that you can own real, physical silver bullion and store it in a tax-advantaged retirement vehicle. American Bullion can discuss your options and help you every step of the way. Our #1 goal is to help you take control of your own finances – and we promise to be transparent, safe, and efficient in the process.
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.