First of all, silver, gold and platinum are precious metals in their own regard and each has its own unique value and use. They are different from each other in many different ways. But we’re here to focus more upon silver, and what is it that makes this precious metal so valuable.
Silver is More Practical and Usable
The reason we say that silver is more practical and usable is that it is less expensive than gold and has way more uses. This is because when gold is mined, it is used as a store of wealth and in jewellery. It certainly isn’t used as money; not anymore anyway.
It may have limited use in gold plating as well, but that’s about it. Silver, on the other hand, is used up once it is recovered as a by-product of different processes and is then used up.
All of the gold that was mined in the world still exists in some form, which cannot be said for silver as it has a multitude of uses. Firstly, it has naturally occurring antibiotic properties which made it a really important part of the medical field.
It was first used by Romans in 269 BC, and in Australia, the fifty cent coin from 1966 was the last silver containing coin in circulation. Coming back to its uses, silver is used in military applications, electrical batteries, relays and switches because of its thermal and electrically conductive properties. It’s unreactive and doesn’t corrode.
Silver is even used in the photography industry as almost 5000 coloured photographs can be taken using one ounce of silver. It was basically used in photographic film and paper. With such a vast amount of uses compared to gold, it is one of the precious metals that is still within the reach of the Australian population at www.goldstackers.com.au
Investment Rediscovered and the Mining Problem
Barclay’s silver ETF has most notably played a really important role in the rediscovery of silver as an investment vehicle. There are more ETF’s that have followed suit and reignited the flame for investment in silver and that has taken much of the silver off the market.
If that’s not enough, it is just not that easy to mine more silver because of increasing costs. We may already know that the cost of mining gold is already high per ounce. The cost of mining silver as a primary metal per ounce is almost the same (it is currently mined as a by-product). Since gold is trading at a very high price per ounce, it makes more sense to mine it, as it incurs a profit.
Silver is trading at a mere fraction of gold which makes it difficult to mine considering the costs involved (it would involve making a loss). Annually 600 million ounces of silver are mined while the consumption is 870 million ounces. This supply problem created is only getting worse and it will get costlier if we were to mine silver in the future. This makes silver a valuable investment if the prices are to increase, due to its mining as a primary metal.