Some of many uses for silver include; Currency, Jewelry and silverware, Dentistry, Photography and electronics, Mirrors and optics, Other industrial and commercial applications, Medical, and Clothing.
All of these uses for silver are in forms of consumption, but the factors influencing the price are going to come from more on the side of speculation rather than demand. The silver market compared to gold has 18 times less turnover money, with an annual physical demand estimated around $15.2 billion.
With such a small market, it would be very possible for large traders or investors to influence the price very easily.
But I believe that there is a rise in industrial, commercial and consumer demand rise for silver. To name a few, in our currently economic volatility, a commodity like silver can be a great hedge against inflation and economic uncertainty. In 1980 silver toped near $50 an oz, in 2011 value of dollars that’s over $137. The current price of silver right now is around $35. Also the historical charts look interesting as the pattern in both inflation and silver price seem to be on a similar draw. As well as the economic indicators.
So as the inflation will start to heard high north in the next couple of years, these type of commodities are going to be the best inflation hedge. We can already see gold the more popular choice for now, which hit record face value levels. But that too will go near it inflation adjusted high level from the 80’s to about and around 2100<>.
|World Silver Supply and Demand
(in millions of ounces)
|Net Government Sales||60.3||63.0||59.2||88.7||61.9||65.9||78.2||42.5||27.6||13.7|
|Old Silver Scrap||180.7||182.7||187.5||183.9||183.7||186.0||188.0||181.8||176.0||165.7|
|Implied Net Disinvestment||87.1||—||12.6||—||—||—||—||—||—||—|
|Coins & Medals||32.1||30.5||31.6||35.7||42.4||40.0||39.8||39.7||65.2||78.7|
|Implied Net Investment||—||11.4||—||6.0||37.4||67.6||64.0||22.0||48.2||136.9|
|Top 20 Silver Producing Countries in 2009
(millions of ounces)