Silver Facts
The Indispensable Metal
What do computers, mobile phones, plasma televisions, and many bandages have in common?
They all use silver.
Countless civilizations have revered this white shiny metal for its innate beauty and intrinsic value. Now, it is an essential component of modern life. Almost daily, scientists are discovering new applications for silver, making it one of the world's most versatile and indispensable metals. What makes silver so useful is a unique combination of characteristics not found in any other single element. Silver is malleable and ductile, for use in jewelry and silverware; is sensitive to light, for photographic purposes; and is a superb conductor of electricity. It also acts as a biocide, killing bacteria, mildew, and mold without harming people or the environment. Moreover, silver can withstand extreme temperatures, is an excellent reflector of light and heat, and is very strong for its weight. To find all of these properties in a single package is one of nature's most remarkable gifts. There are three main uses for silver: industrial, jewelry, and photography. Together, they represent the bulk of silver consumption. New, dynamic uses continue to supplement the already diverse applications within each group, on a regular basis.
Industrial Uses
Health and Medicine
Industrial consumption represents a major percentage of annual silver demand. The newest and most exciting area is silver's role as a biocide, or germ killer. Although silver's antibacterial properties have been known for centuries (the ancient Phoenicians carried wine in silver containers to keep it fresh), only recently have researchers discovered how silver's germ-fighting power works. Silver atoms penetrate thin bacterial walls, disrupting growth and reproduction. These atoms do not harm thicker human and animal cells. Most important, bacteria cannot build up an immunity to silver like they can to some antibiotics. Silver-based drinking water purifiers are becoming increasingly common in homes and offices, and many swimming pool owners have switched from harsh chemical systems to silver-based cleansers. A number of food and beverage makers use silver in food preparation to keep equipment free from bacteria. Commercial air conditioners utilize silver to prevent the buildup of bacteria that cause legionnaires' disease and other airborne illnesses.
Clothing manufacturers include silver in their textiles to kill bacteria and keep clothes odor free. Bandage makers integrate silver into their products to stop the growth of germs in deep wounds. Hospitals use silver coated catheters and even infuse room furniture with silver particles to limit the spread of deadly bacteria. And, as government agencies worldwide outlaw more and more toxic chemicals, silver is filling the void as a biocide in wood, plastic, steel, and other construction materials.
Electrical and Electronic Uses
Almost every computer, cell phone, and appliance contains silver. It is the perfect substance for coating electrical contacts---like those in printed circuit boards---because of silver's high electrical conductivity and durability. However, it is also malleable enough to produce a tight and secure fit. Painting silver on any non-metal surface provides an electrical pathway, eliminating the need for wires in many devices. For example, RFID (Radio Frequency Identification Device) chips are replacing bar codes on many items in supermarkets, and the chips' paper thin antennas consist of sprayed-on silver. This versatile metal also plays a health role in electronics fabrication. Worldwide, silver is rapidly substituting for lead in solder and brazing alloys because of concerns regarding the toxic fumes emitted during soldering processes.
As a component in solar cells, nothing beats silver for price and efficiency. The same goes for keeping your house or office cool, as more and more windows employ a silver coating to reflect the sun's rays. Silver is virtually 100 percent reflective after polishing. This unique optical reflectivity makes silver ideal for use in mirrors, in glass coatings, or on other metals.
Electrical and Electronic Uses
Despite the growing popularity of digital photography, silver-based films and papers are still in demand. For instance, medical imaging devices employ silver halide because it produces clear X-rays. Motion picture studios also prefer silver-based film to video for its vibrant color and clarity.
Jewelry and Silverware
Silver has been a cherished heirloom and gift for centuries. Historians claim that by 3100 BC, ambassadors from Crete brought silver vases as gifts for the Egyptian king. Today, sterling silver is a favorite medium of creative and innovative designers. Because it is so soft and malleable, they can shape it into intricate forms. Fashion-conscious consumers value silver jewelry because of its beauty, contemporary designs, and affordability. The current major centers for silver jewelry manufacturing are Italy, Thailand, India, and Mexico.
Sparkling flatware and serving pieces also are welcomed gifts and have graced elegant dining tables for centuries.
Jewelry and silverware represent nearly a third of world silver demand.
Silver as a Store of Value
In many countries, silver denotes money. As early as 700 BC, Mesopotamian merchants used silver as a form of exchange. Later, many other civilizations came to depend on the inherent value of silver in coins. Today, millions of individuals throughout the world recognize silver's intrinsic worth and include it in their investment portfolios, to diversify their holdings. Here are some common forms of silver investment:
Silver Mining Stocks
For investors who are familiar with the equity market, buying stocks in silver mining firms offers capital appreciation, as well as the potential to earn a dividend.
Mutual Funds
Precious metals mutual funds enable investors to buy the general market risk, instead of company-specific risk. Some funds offer a broad mix of international mining stocks; others invest in specific regions, such as North America, Australia, or South Africa.
Exchange-Traded Funds [ETFs]
For investors who seek exposure to the physical silver market, but have no desire to possess the metal or pay direct insurance, assay, and storage costs, ETFs offer an alternative. They have major exchange listings and trade like equities. Investors can buy shares in a trust that owns the silver bullion.
Silver Bullion Bars and Coins
Investors can own bullion by purchasing silver bars in a variety of weights and sizes, from a 1,000-troyounce silver bar to a 1-kilo bar or even a 5-gram bar. Major bullion companies, brokers, and coin dealers sell these bars.
A bullion coin is official government-issued currency with a legal tender face value. The silver content determines its actual market worth. The issuing nation states this content on each coin and guarantees it. A bullion coin's market value depends on the changing price of silver, plus a small premium. Many countries now issue silver bullion coins, including the United States, Mexico, and Canada.
Silver Futures and Options
For sophisticated investors, silver futures allow individuals to control a significant amount of silver for a small fraction of its total value. Silver options provide investors with the right to buy or sell silver at a fixed price, at a specified future date.
Silver Sources
Silver comes from three major sources: mines, recycled silver, and aboveground stocks.
The world's largest producers of silver include Peru, Mexico, Australia, China, Chile, Russia, Poland, the United States, and Canada. Primary mines yield about 30 percent of annual silver production, while almost 70 percent is a by-product of gold, copper, lead, and zinc mining.
Approximately 20 percent of the world's silver supply is from recycled materials, primarily, used photographic materials.
