Thanks to greater industrial and jewelry demand, silver has become a highly valued investment in 2020, hitting record-high prices. According to a report by The Silver Institute, as of June 30 global silver holdings hit a record high of 925 million ounces, accounting for approximately 14 months of mine supply.
While many investors are choosing silver and other precious metals as a safe-haven from volatile stocks, silver continues to be a popular precious metal for many other reasons. Silver is used to manufacture many everyday use items, as well as industrial products.
The Versatility of Silver
The first product that comes to mind is silver jewelry, thanks in part to its resiliency and long-lasting qualities at affordable prices. While gold possesses many of the same qualities, silver has greater reflectivity and brilliance, making it a popular addition to jewelry collections. Silver jewelry’s quality and design diversity will continue to drive this demand globally.
Silver’s excellent thermal and electrical conductivity make it the metal of choice for electrical components, switches and contacts. The smallest quantities are needed for contacts in switches for many household items. Silver contacts are used in everything from consumer appliances to automobiles.
Tiny particles, called nanosilver, are used in printed electronics such as radio frequency identification (RFID) tags. Additionally, batteries produced with silver oxide are used to power cameras, watches, as well as laptops and even electric cars. The tremendous increase in mobile devices, media storage and other new personal electronics that function on silver components has also driven its demand.
When silver is dissolved into nitric acid, it produces silver nitrate which can be converted into powder or flakes. This, in turn, is converted into a silver paste which is used in the production of photovoltaic cells in solar panels. With more homes and businesses converting to solar technology, silver is in greater demand to meet this need.
Silver is also used in nuclear energy for the control rods that capture neutrons and slow the fission rate in reactors.
- Investment Mechanism
As precious metals continue to be a popular safe-haven in an unstable economy, investors have been purchasing silver in a number of forms. Silver bullion and coins remain a popular investment choice today thanks to its long-lasting quality and high luster. Many individuals choose to buy and store 99.9 percent pure silver bars, coins or medallions. Purchases of silver coins and bars increased 12 percent in 2019.
As a commodity, many also invest in silver through stocks and mutual funds. This enables investors and traders to use silver-inclusive funds and futures as hedges against volatile stock portfolios. Additionally, as the Fed keeps rates near zero, precious metals including silver have become a more profitable investment tool.
A Precious Metal with Sustained Value
Investing News reports that Keith Neumeyer, CEO of First Majestic Silver, reiterates that the price of silver will ultimately reach $130 per ounce. This belief stems from Western world governments taking on massive debt loads. With interest rates staying low and increasing deficits, precious metals like silver will substantially increase in value.
As we have seen, silver has a myriad of uses, especially in the technology and energy manufacturing arenas. Additionally, demand is also increasing from uses in medicine and biotechnology. As a monetary metal, it will continue to rise as interest rates and geopolitical factors affect the global financial markets.
Along with the demand for silver and other precious metals, the need for skilled professionals in the mining and minerals sector has grown. Contact us today for more information on how we can help your company connect with highly trained and skilled talent in the precious metal industry.