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Precious metals are unique assets: highly liquid, yet scarce; they have emotional, cultural and financial value.
Investors range from individuals to pension funds and sovereign wealth funds, and are located in both developed and emerging markets.
Characteristics of silver
Silver has been considered a precious metal for over 6,000 years and was first used as a currency by the Greeks in around 700 BC.
What makes silver the perfect metal for so many of the sectors that make up the world’s full demand is:
- Its malleability and ductility.
- Its characteristic lustre, due to its characteristic reflection.
- Its very high electrical conductivity, which together with its ductility and malleability, makes silver the metal of choice for the technology industry (along with gold).
- Its medical applications, being able, for example, to pass through the cell walls of bacteria without damaging human cells, destroying the reproductive capacity of the former.
The price of silver
In the last fifty years, the price of silver has quadrupled from just over 4 dollars an ounce in the early 1970s to almost 16.5 dollars an ounce today, and has even exceeded 35 dollars an ounce on two occasions.
Silver investment
Silver investment is considered to be the little sister of gold investment, so much so that silver follows the movements of gold very closely.
Facts and figures for investors to consider:
Although silver follows the movements of gold, it moves much faster. For every 1% change in the price of gold, the price of silver moves 3%.
It is a safe investment, as it has always maintained its status as a precious metal throughout history.
It offers competitive returns, second only to gold.
Average annual demand for SILVER:
~25,000 tonnes*.
Over 54% is destined for industrial use.
Over 20% is converted into coins and bars.
Over 20% is used in jewellery.
The remaining 5% is used in cutlery.
(*) Source: The silver institute.
As we can see, silver is a metal with a fairly diversified demand, which plays a positive role in maintaining its value as a precious metal. Industries such as photovoltaics and electronic devices constantly use silver due to its unique properties.
