Silver, aka the white metal, has much in common with gold. Both are known for their use in jewelry and other items of decorative adornment and both are extensively needed in industry. Silver then can be considered as both a store of value and a valuable commodity in a similar manner to gold.
Of particular importance for potential investors to consider is that annual production of silver for the last fourteen years has been less than the annual consumption.
The estimated annual shortfall of 133 million ounces has been made up from existing stocks that at the present time are believed to be circa 400 million ounces. To indicate the advance in silver usage in recent years, in the 1980s stocks amounted to some two billion ounces.
Industrial applications accounted for some 409 million ounces in 2005 with usage continually increasing, particularly in the ever developing hi tech, medicine and fuel cell markets, although the demand in the East for silver jewelry and silverware is estimated to have risen by 20% in 2005 alone. As China, India and other Asian nations continue to prosper so the demand for the white metal can be expected to increase.
- Silver is the best electrical conductor of all metals and is an excellent conductor of heat.
- It is ductile meaning it can be drawn out into fine wire, it is malleable meaning it is capable of being beaten or rolled into shapes and it is both sensitive to and reflective of light.
- Silver can stand extremes of temperature and has a natural strength. These unique properties do not allow for substitutes in most of its applications.
It is these properties that have made silver so much in demand for both traditional and developing industrial applications.
- Circa 700 tons of silver is used as a catalyst in the plastics industry for the production of ethylene oxide and formaldehyde, essential compounds needed to manufacture polyester fabrics and solid plastics.
- Billions of silver-zinc batteries are manufactured every year to power watches, cameras, remote car keys and many other small electronic devices that require higher voltages and longevity of use.
- Silver use in conductors, switches, contacts and fuses means that it is found in washing machines, computer keyboards, vacuum cleaners, electric drills, tumble dryers, light switches, microwave ovens, dishwashers, in fact virtually every modern household electrical appliance.
- A modern car can have over forty silver tipped contacts and switches for starting, braking, power assisted steering, electric windows and locks, electrically operated mirrors, sat nav, rear window demisters and other electrical operated accessories and engine components.
- From small outboard marine engines to the massive engines and electrical circuits required for super tankers, from light aircraft to jumbo jets, silver is a key component.
- In medicine the use of silver as a bactericide has been known since the late 1800s although its use in purification has been known for millennia. Silver sulfadiazine is the most effective known treatment for burns and is used world wide.
- Silver compounds are being developed for treating battlefield wounds on the spot and in hospital casualty areas, other silver compounds and silver surgical accessories are in constant use in medicine world wide.
- Silver plays the major role in photographic and X-ray applications with a consumption of 165 million ounces in 2005, a little over half of that used in the jewelry and silverware markets. Its use in X-rays is not confined to medical applications but it is the most effective method to reveal flaws in metal components in aircraft and ships.
- The number of applications that need silver is enormous and constantly growing. Think of catalysts, mirrors and other reflective coatings, water purification, solar panels, brazing and soldering, light sensitive spectacles and you will still only be just scratching the surface.
- Steel bearings electroplated with pure silver have more strength and load carrying capacity than any other. These bearings are essential requirements for heavy duty applications such as military vehicles or aviation jet engines.
- The recent developments in fuel cells, radiography and as an anti bacterial agent all need silver as a principal and necessary component.
We will be looking at the ever increasing wordwide demand, currently running at circa 410 million ounces, for silver jewelry and giving our thoughts on silver coins and bullion as investment vehicles elsewhere on this site.
Silver has a growing importance as a strategically essential metal and with demand outstripping supply it is reasonable to expect the long term price of silver to increase.
This is why the legendary investment guru Warren Buffet is reported to have purchased 130 million ounces, the legal limit to ownership, in 1997.
Other well known holders of silver include Bill Gates of Microsoft fame and George Soros, the highly successful forex trader.
Sites That Link to this Post
- New 2009 List of Silver Mining Companies | Forex Trading Tutorial | September 6, 2009