The Story of Silver
Posted by Luis Marini on Wed, Feb 16, 2011 @ 10:22 AM
For thousands of years, silver has been one of the most recognized and valued precious metals. While most people connect silver to its use in art, currency, jewelry or tableware, it is also used in more unlikely places, such as dental repairs, photography and industrial products.
While sometimes seen as less valuable to gold, its sister metal, silver continues to find itself in demand due to its limited supply and many industrial uses. For these reasons, silver is one of the most sought after vehicles of wealth investment.
Silver’s Past
According to The Silver Institute, the first major source of mined silver was found in the region of Anatolia between 4,000 and 3,000 B.C. This area, known today as modern Turkey, supplied silver to civilizations throughout Asia Minor and Near East.
Silver bullion, which was mined and produced by Roman miners, played a crucial role in the abundant wealth and stability of the Roman Empire currency. Sometime between 600 B.C. and 300 B.C., the Laurium mines were discovered near Athens, Greece, and grew to become the world’s largest silver production site.
Additionally, silver from Spanish mines (excavated by both the Carthaginians and Romans) directly impacted silver trade for more than 1,000 years, and also played an integral role in the Roman domestic market and the Asian spice trade.
In the first and second centuries A.D., silver mining expanded throughout Spain and into continental Europe. With the discovery of silver in the New World, the Spanish brought Bolivia, Mexico and Peru to the forefront of silver mining and production.
Did you know that silver also played an important role in the creation of United States currency? In fact, Congress used silver to create the U.S. monetary system in the late 1700s based on the silver dollar, which used silver until it was discontinued in 1965.
Silver’s Present
Following the inflation of the 1970s, silver prices began to adjust throughout the recession of the early 1980s. A decrease in both demand and supply of silver resulted in a dramatic decline in its market price, thus impacting it’s industrial and investment markets. By the mid-80s, silver demand began to increase again due to low prices and an increase in industrial manufacturing.
As the highest electrical conductor of any element, as well as the highest thermal conductor of any metal, silver lends itself useful to the function of batteries, catalysis in chemical reactions, solar energy and more.
Within the past six months, the price of silver has increased by an incredible 61 percent. This shift in market price places an ounce of silver, in comparison to gold, at a 45:1 ratio — the highest it has been in five years.
Fun Fact: In November 2010, the U.S. Mint sold a record 3,775,000 silver eagle rounds.
Source: SeekingAlpha.com
The Future of Silver
While the future of any economic variable is uncertain, the value of silver in the coming years looks promising. Precious metals analyst Mark Thomas published his predictions in the Silver Shortage Report, which indicates a continued increase in the demand and price of silver in 2011 and 2012.
The report states: “Our 2012 price target is $65, which would be an additional 55% annual gain in 2012. Finally we expect the price to hit $120 by the end of 2013 for an additional 85% annual gain. That would mean the price would go from approximately under $30 recently to $120 over the next three years for a potential staggering 300% plus gain.”
What do you predict for the future of silver? What do you foresee in fluctuations of industry needs and investment demand? Let us know your thoughts.
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Sources:
http://www.silverinstitute.org/
Wikipedia: Silver
Wikipedia: Silver as an investment
CommodityOnline: Silver to hit $42 in 2011
USA Today: Is loading up on silver a good investment idea?
Seeking Alpha: Silver – Investment of the Decade, Or Conservative Bubble?