Natural Resources – Silver

Silver has thousands of industrial uses and is considered by investors as a store of wealth. Since early history, it has become valuable for (1) malleability, (2) aesthetics, (3) antibacterial, and (4) rarity. All the silver ever mined in history would fit in a 52 meter cube (1,464,700 metric tons). Silver is not as rare as gold, but that has allowed it to be used for smaller denomination, and as a result has been the most widely used for coinage. The Egyptians began using it before 2600 BC, and valued it more highly than gold. Today, only a third is used for coins, silverware and jewelry. There are more than 10,000 industrial uses, since it is the best metal conductor of electricity known to man.

Interestingly, most mined silver is produced as a by-product when mining other metals, primarily copper, zinc/lead and gold. The majority of silver has been consumed. Some silver experts believe as much as 90 to 95% of all the silver ever mined has been lost to landfills.

Silver, like gold, is a precious metal that is considered a hedge against inflation and economic stress. If you had bought it in 2003, you’d have gotten a 500% return in the last 10 years. The silver market is only a fraction of the size of the gold market, which means less liquidity. Its driven significantly more by industrial demand, causing higher volatility, but fares well against general market volatility over the long term. Silver also helps diversify a portfolio, resulting in less overall risk.