Silver has attracted man’s interest for thousands of years. In ancient times, silver deposits were plentiful on or near the earth’s surface. Relics of ancient civilizations include jewelry, religious artifacts, and food vessels formed from the durable, malleable metal.
The noble metal is already processed by men since 5000 BC. Its significance rose when the Greeks produced the first silver coins about 600 BC. In regard to this usage as money-metal, silver had a larger significance than gold until into the 20th century. In 1792, silver assumed a key role in the United States monetary system when Congress based the currency on the silver dollar, and its fixed relationship to silver. Silver was used for the nation’s coinage until its use was discontinued in 1965. Silver coins are currently only in use in Mexico.
At the turn of the century, an even more important economic function was emerging for silver, that of an industrial raw material. Today, silver is sought as a valuable and practical industrial commodity, and as an appealing investment. The largest industrial users of silver are the photographic, jewelry, and electronic industries.
Trading in silver futures and options provides individual investors with an easy and convenient alternative to traditional means of investing in silver – such as coins and mining stocks.
Silver outstrips all other metals in brightness of its color, its polishing-ability and reflectivity. The white metal has moreover the highest conductivity of all metals for electricity and heat. It is easy to process and reacts only with some view chemical substances. Because silver is to soft in its pure form it is used as alloy with copper. The term “Sterling Silver” used in the jewelry industry is an silver-copper alloy with a silver-share of at least 92.5 % (therefore the mark 925). Copper is used because it does not change the color of silver.
In nature, pure silver (so called native silver or solid silver) is even rarer than gold. Silver is therefore mainly recovered at the mining of base metals. Silver ores are often mixed with lead ores. 50 % of the silver-mining production in the U.S.A. accrues as by-product of copper, lead and zinc. This trend is coming to increase in the future. 20,000 tons of silver are annually extracted.
Biggest producer of silver is Mexico with 15 % market share, then come Peru (14 %), Australia (12 %), China and the U.S.A. (each 11 %). About 25 % of the silver production comes from recycling of argentiferous scrap. This rate increased steadily in the last years.
43 % of the worldwide production is processed in the industry. Silver is used in the food technology, the chemical industry and the pharmacy because germs and bacteria cannot survive on a silver surface. Silver finds usage even in the electrical engineering such as at the manufacturing of batteries. The share at the production of jewelry and silver products (such as silver cutlery) totals 30 %. This sector stays relatively constant.
Third-most important consumer is the Photo-technique with 22 %. However, this rate will constantly decrease because of the displacement of conventional photo cameras through digital cameras. Finally about 4 % of the silver production finds its usage in the production of coins and medals.
The demand for silver exceeds the supply already since many years. The price for silver is therefore in a steady uptrend, especially because the reserves of diverse stocks and states are nearly completely depleted. Successful investors like Warren Buffet and George Soros purport to have invested in silver stocks.
Most important stock exchange centers: NYMEX Comex Division (recently rebranded CME Globex, after a merger between Chicago Mercantile Exchange and NYMEX), CBOT (Chicago Board of Trade), LBMA (London Bullion Market Association), Tokyo Commodity Exchange.
Price quotation: U.S. Dollars and Cents per ounce (oz).
Contract-cycles: March, May, July, September and December.
Contract-size: 5,oo0 oz.
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