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Is silver beneficial?

ForexZig.com February 19, 2013
Silver investing

Silver investing

Silver has multiple uses. On the one hand, it is considered to be an investment, preserving the value of money during time, but also has the largest conductivity among metals. This makes it an important industrial material essential for many industries.

See in what fields it is primarily used:

-> it is used in photography and printing industry;

-> in the production of systems for water and air purifying ;

-> in the field of digital technology and telecommunications;

-> in the manufacture of wires, switches, fuses and electrical connections, because silver does not corrode or cause overheating and fires;

-> in the manufacture of jewelry.

This metal is electrically conductive and is embedded in any car, TV, dishwasher, fridge, mobile phone (at least 250 milligrams), laptop (about 1 g) and others. Batteries are manufactured with silver alloys. Chemical reactions could be significantly accelerated with the addition of silver. Approximately 700 tons of this metal is used continuously in the global chemical industry for the production of plastics. It is also used in pharmaceuticals. Silver sulfadiazine is the most powerful ingredient in the treatment of burns. Besides, each year patents granted for use of silver as metal are more than the applications for all other metals.

Given the fact that silver is unrecoverable, its industrial use decreased each day its available amounts. That is why, world production of silver will hardly meet the increasing needs.

What we mentioned above gives reason to think whether in fact the expected deficit of the metal will reflect favorably on price and whether the current value of silver is a good purchase.

See what is the correlation gold – silver during recent decades, up to the past 2012.

correlation_gold_silver

Ratio of gold and silver

The table shows that over the past 50 years the ratio of the two most popular precious metals ranges between 1:21.5 and 1:94.3. In last year this ratio was about 1:52 – this is the average over the past half century, but too high, considering that historically it was 1:20 or even 1:15. This shows that in recent decades silver has been undervalued against the yellow metal, despite its increasing demand and depleting amounts, which creates prerequisites for investment at this current time.

silver_statistics

Statistics

 

Expect more articles related to this theme…

Related articles -> Silver – the undervalued precious metal; How to trade silver?

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