Guide to Investing in Silver – Chapter 3: Silver as an Investment Vehicle

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Updated: Mar 5, 2019, 13:14 GMT+00:00

This is chapter number 3 out of 15. Read the rest: Read Guide to Investing in Silver – Chapter 1: IntroductionRead Guide to Investing in Silver – Chapter

Guide to Investing in Silver – Chapter 3: Silver as an Investment Vehicle

This is chapter number 3 out of 15. Read the rest:

Read Guide to Investing in Silver – Chapter 1: Introduction
Read Guide to Investing in Silver – Chapter 2: Starting out as a Silver Investor

Since ancient times, silver bullion has served in its role as a monetary metal. Like gold, it is durable, divisible, has numerous uses, compact and cannot be created by hand. It has to be extracted and refined and thus its value is not easily eroded like the indiscriminate printing of paper money.

As mentioned earlier, silver, unlike gold, has a healthy industrial demand which has been growing consistently for the past 30 years, especially with the advancement in electronics in our modern society. The ductility of silver, the strength, malleability, its reflective properties and electrical and thermal conductivity allows it to be used for many industrial purposes. In addition, it has high endurance for extreme temperature.

Apart from its unique industrial purposes and properties, it also has medicinal properties. It is used in several health care products as it possesses unique antibacterial properties. Most dressings and wound care products have a layer of fabric inlaid with silver to curtail bacterial infections. As the world becomes more health conscious and concerned about the spread of diseases, silver is used for its microbicidal properties.

An estimated 95% of all the silver that has been mined throughout history has already been consumed for industrial purposes. That amount of silver is irrecoverable and cannot be replaced. In 1900, globally, there were an estimated 12 billion troy ounces of silver. One hundred years later, today, that amount has declined to around just 300 million troy ounces of refined silver. At today’s prices, just four billion dollars is enough to purchase all the refined silver in the world!

Those who read the headlines will know that the world is changing. The geopolitical arena is getting increasingly more unstable. The economies of the world are also evolving as trade become more complex.Chinais also emerging to be an economic giant which one can no longer ignore. The world’s most populous country is slowly getting more affluent and this has fueledChina’s insatiable demand of mineral resources all over the world. It is for this reason also that exports of mineral resources by Australia to China have sparedAustraliafrom a technical recession while the rest of the world’s economies are contracting from the global financial crisis.

With silvers dual role as a storehouse of wealth and as an industrial metal, it is likely that the demand for silver will increase exponentially. The changing macro economic scenario can be regarded as a catalyst for a silver bull’s market. Furthermore, the supply of silver is limited in the face of ever increasing demand. Silver’s unique properties also make it harder to be substituted by other metals. Together all these factors will ensure that silver will continue to enjoy a healthy demand for years or even decades to come. Taking into consideration all these factors, silver now represent an ideal investment vehicle as well as a store of wealth.

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Table of Contents

Intro

Intro