Silver: The Beginner’s Guide 2018

Silver is an element with atomic number 47 and symbol in chemistry is Ag, coming from the Latin word “Argentum”. But silver is no ordinary metal: it has distinct characteristics and a long history of monetary use mainly as coins, so much that the word silver is used in many languages as “money” for example as in french, German Spanish, welsh etc. Furthermore, there is even a country named after this lustrous metal: Argentina. Let’s take a well deserved closer look at silver which has its marks all over the world and, in our daily life.

Silver is one of the seven metals of antiquity, the others being gold, iron mercury, tin copper and lead. Each metal of antiquity has a day and silver’s day is monday. In astrology, silver is cancer’s metal and the moon is its celestial object.

Silver is found in the top parts of the Earth in native form an as an alloy with other metals and minerals. Approximately 25% of silver mining output comes from pure silver mines while the rest is obtained as a byproduct of other mines such as gold, copper and lead-zinc mines.

Silver has many physical and chemical properties opening a wide spectrum of usage from jewelry to energy. Silver has a white lustrous color ideal for jewelry. It tops metals in electrical conductivity, thermal conductivity and reflectivity. It is 50% heavier than the same volume of iron and has approximately 10.5 times the density of water. It is a ductile, malleable metallic element with bright white color. It is resistant to air and water but gets tarnished when in contact with sulfur compounds. Silver’s purity is measured on a per mile basis; a 95%-pure alloy is described as “0.950 fine silver”.

Silver is used in many forms other than currency, such as solar panels, water filters, jewelry, ornaments, tableware, utensils, and as an investment instrument. Silver is heavily used in electronics especially in mobile devices thanks to its superior electrical properties.

Silver is also the best reflector in optical properties and is used only in expensive and mission critical mirror coatings because of its price. Water filters have silver for its antimicrobial effects.

Silver jewelry is always a fine choice for loved ones. Silver shines on indoor and outdoor ornaments catching all eyes. Tableware, silver cutlery and utensils are expected to come out every time when guests are invited to dinner.

As an investment, silver is immune to fiat money disease of inflation created by central banks and has no counter party risk as it is a physical asset requiring no backing. It is minted into coins and can be easily carried everywhere.

Silver is also used as a catalyst in chemical reactions and its compounds are used in photographic films and medical devices such as x-ray machines.

In the near past, silver’s antimicrobial properties entered more and more into daily life in clothing and biomedical thanks to its usage in bandages, antiodour socks and clothes etc.

 

 

Silver as Money

Silver has been used as money for thousands of years, in fact it has a much longer history and geographical usage than gold in monetary sense. Silver, as an alloy with gold named electrum was first minted as coins around 700 BC in Lydia which is in modern day Turkey and continued its reign for thousands of years till the last 150 years, silver has been removed as money and step by step governments around the world began using other metals in the making of their coins.

In our day, national mints produce silver coins for commemoration or collection purposes. For example, the US Mint produces gold and silver American eagle coins and it has a presidential collection with the pictures of the US presidents on one side. The Royal Mint of Canada mints coins with the Canadian maple leaf, The National Mint of China uses the Chinese panda etc.

There are also private mints which produce rounds without any face value but with many different designs pleasing the eye.

Silver in Investment

Silver is a scarce physical resource which demand is on an uptrend. Silver demand surpasses supply and the deficit is covered by reserves and recycling. Industrial demand for silver is increasing thanks to new uses discovered mainly in solar energy, biomedicine, and electronics. This creates a widening gap which causes energy accumulation for uptrend move in the price of silver.

As silver has no counter party risk, it is immune to central bank decisions and deliverability issues. Central banks cannot increase the supply of silver as they do in fiat money. Silver cannot be created by pressing a button on a printing press or entering few digits on a computer screen. Thanks to these properties, silver is a protection against inflation.

Silver is produced by investing time and energy in, first, discovering, mining and refining. It is a limited natural resource, not a man-made artificial currency. It does not hold the defects of a cheque or note which has to be cleared by a bank: 1 kg bar of silver is 1 kg bar of silver everywhere.

Also, silver is used in portfolios, just like gold, to hedge against high fluctuations in monetary markets. Silver, enjoying a continuous natural demand thanks to its industrial use, has no problem in finding customers while fiat money issued by central banks may observe severe downside movements with a single decision. Furthermore, in a currency war, where countries decide to create a pseudo-boost in their exports by devaluing their currencies, no one can predict the value of a portfolio at the end of the terms. At this point, the another wonderful use of silver arises: it is an ideal hedge instrument to include in portfolios to balance risk.

Silver as a Store of Value

Paper money has no intrinsic value: it has value as long as the issuing central bank says so and it holds obligation of acceptance as long as the state declares it as legal tender. On the other side, silver has no counterparty risk because it has intrinsic value. While silver may come from on the ground stocks and recycling, it originally comes as a result of mining which takes tremendous energy and time. Silver is a physical asset, 100 grams of silver is 100 grams of silver no matter who says what and it is the fruit of the work, energy, knowledge put into the mining and refining processes.

When buying physical silver, silver bullion in high weights should be the go-to choice, because in jewelry and silverware the artistic design, production and marketing expenses come into play and in small bullion and coins the labor value is relatively greater than in bigger bullion and coins.

Silver in Jewelry

Silver in its pure form is generally considered too soft for jewelry. Thus an alloy of silver named Sterling silver is widely used for making rings, bracelets and other jewelry items. This alloy contains 92.5% silver and the rest of the weight comes from other metals, generally copper. Silver’s purity is expressed in units of parts of 1000. Sterling silver has the minimum millesimal fineness of 925.

Sterling silver is used to make all sorts of jewelry: rings, bracelets, necklaces, earrings and many more. While sterling silver carries the silver shine, it is open to react with sulfur compounds forming silver sulfide which gives a blackish color. Also when entered in reaction with ozone, silver oxide is formed. These changes in purity due to silver sulfide and silver oxide compounds opens the door to tarnish because the copper in sterling silver may react with oxygen.

Sterling silver is many times combined with beautiful stones such as moissanite, swarovski crystals or diamond to create a more appealing jewelry.

Happily, there are many ways to clean silver and return it to its initial lustrous color. While there are professionally developed chemicals on the market, using readily available materials at home, such as corn starch or even toothpaste may be used to get rid of low level of tarnish. For example, leaving silver items in a bowl of lemon-lime soda for an hour and then rinsing and drying could be enough to say goodbye to tarnish. Silver is generally hand cleaned and polished to prevent damage and only if there is a severe tarnish or corrosion, more advanced professional techniques are used such as wheel polishing.

sterling silver flatware

Silver as Silverware

Silver has been an essential part of every home for centuries: silver shown in the living room and especially on the dining table has been and still is a sign of prestige and elegance.

Main elements of silverware are tableware, cutlery sets, silver picture frames, and candlesticks.

Silver tableware refers to the dishware which is used serve food and drinks on a dining table. It includes glassware, cutlery, utensils to cut and serve food, and also decorative items to complete the dining experience such as silver ornaments, oil lamps, and candlesticks.

Cutlery is any silver utensil used to prepare, cut, serve and eat meals, but generally, when silver cutlery is mentioned, it is used to describe forks, spoons, and knives. Just as in jewelry, sterling silver is used as it is harder than pure silver.

Silver frames which are often gifted on special days like weddings and anniversaries are an aesthetic and caring way to keep memories alive. Silver frames are ideal gifts for newborns, wedding anniversaries and graduations.

Silver candlesticks are not only beautiful even when candles are not lit, but an apex for table decoration showing caring for the guests and the finesse of the hosts. Candlesticks, which are mostly used as decorative elements in living and dining rooms, have a spike and/or a cup to hold the candle in place. There are also many different candlestick designs for mufti-candle candlesticks.

 

Silver in Industry

Solar Energy

Silver is used in the manufacturing of photovoltaic panels and in the fabrication of solar power reflectors which capture and reflect sun rays, respectively.

Water purification

Silver is used in water purifiers to prevent the growth of bacteria in filters. Silver catalyzes oxygen and sanitizes the water which is used instead of chlorination.

Electronic use

Silver is an essential a part of many electronic devices from computers, tablets, microprocessors to cell phones.

Optics

In thermal and infrared telescopes, silver coated mirrors are preferred over aluminum mirrors thanks to its high reflectivity and low emission properties.

Medicine

Electronic circuits left aside, silver is used as coating in some medical devices. Also, thanks to its microbial effects wound dressings do have silver components.

Clothing

Silver inhibits the growth of microbes on clothes and is beneficial to reduce odors and the risk of infections.

 

Silver Prices

Silver prices are determined in London at the London Bullion Market Association. The determined price is called the “silver fix” and it is done daily to facilitate agreements between parties to buy and sell silver and/or to maintain market conditions by channeling supply and demand to a price level. The price fixing process concludes a silver fix in US dollars.