Guide to silver

Guide to silver

Silver can be used for a vast range of industrial purposes, as well as an investment option. It’s one of the most important elements in the history of mankind: the starting point for wars, conquests, inventions and innovations.

But what is silver? What are its key properties? What is it used for? Where can it be found? Why is silver so valuable and how can it be bought as an investment?

The chemical properties of silver

Silver is ductile, malleable and an excellent conductor of heat and electricity. The metal has long been valued for its ability to be readily worked, and its resistance to the corrosive effects of moisture and oxygen. The sheen of pure silver is due to its electron configuration, which means all visible light is effectively reflected, which is the basis for the metal's shiny, bright colour.

Silver also has anti-microbial and non-toxic properties, so it can be used for water purification and food-processing. It is also the metal with the highest electrical and thermal conductivity. The varied chemical properties of silver means it is ideal for use in a huge range of industrial processes. 

What is silver used for?

Silver has been used for many thousands of years as currency and in creating decorative objects and jewelry, as well as to display wealth. Now, silver can be found in your car, in your TV screen, in your light switch. It’s used in soldering, tableware, radiography, and domestic and industrial electronic devices. It’s used in the solar panels and cloud seeding machines that we’ll need to tackle climate change.

Because of the many industrial uses of silver, economic growth can have a significant impact on silver prices. 

Where can silver be found?

22,600 tonnes of silver are produced annually, with about a quarter of the production coming from silver mines, and the rest being refined from the ores of other metals like lead, copper and zinc. Opened to the rest of the world by the Spanish Conquistadores, Mexico, Peru and Chile are still among the world’s largest silver producers, alongside China and – after the discovery of giant reserves of the metal – Poland.

Why is silver so valuable?

Silver has limited supply and considerable industrial demand. The chemical usefulness of the metal means that even as one market – photography – dwindles, another – like solar panels – replaces it. The fact that silver can be readily worked and is resistant to corrosion was behind its use in coinage and jewelry, and archaeologists have found evidence of silver being used as a store of wealth for 5,000 years. 

How can silver be used as an investment?

Unlike gold, silver has a substantial industrial market competing with and impacting the market in investment metal. But despite this, silver’s market price has a strong correlation with that of gold, with the metals’ prices moving in opposite directions on fewer than 25% of trading days since 1968.

Silver is considered by many to be a 'safe haven' investment, providing some protection against inflation because as its price tends to lift when interest rates fall behind the rising cost of living. Many investors use silver as part of a portfolio, or as a hedge alongside other asset classes. 

BullionVault provides an online marketplace allowing investors to buy and sell silver bullion online. To get new investors started, we offer four grams of free silver to let you try out our online platform for yourself, risk free. 

Find out more about buying silver bullion online with BullionVault.

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