What kind of a metal is Silver?

Silver

Silver is hybrid between an industrial metal and a precious metal. About 53% of the end demand for silver is from the industrial sector, compared to about 12% for gold. This means silver is more sensitive to swings in the business cycle than gold is. Investors view silver as a safe haven asset in the same way they do gold, and as a hedge against inflation and paper currency weakness. Silver is benefiting from the uncertainty over the outlook for the global financial system and over what government intentions are, given the aggressive quantitative easing and the rapid run-up in government debt levels.

Silver is the Green Metal

Unlike gold which is useful predominately as a store of value, silver has a dual personality, as both an industrial and monetary asset. Silver's innate physical properties make it an ideal ingredient in several industrial applications. As nature's best electrical and thermal conductor, the metal is perfect for high-performance electronics or high-voltage circuits. Silver's high reflectivity makes it a must for fine-precision optics, and photosensitive silver compounds are the engine behind photographic film. The metal is even a natural biocide, which is handy in sterilization and treating wounds. Demand could continue to grow long term, since silver is a component in many up-and-coming "green" technologies. Photovoltaic cells in solar arrays require silver coatings. Water purification plants use silver compounds to prevent bacteria and algae buildup and super-efficient, eco-friendly silver-zinc batteries may soon supplant their lithium-ion cousins in the rapidly growing electric car market.

Gold/ Silver Ratio Helps Silver Bullion Buyers

In the second half of 2008, the gold/silver ratio reached its highest point in almost 14 years. The historic gold/silver price ratio is 15:1. With gold now approaching $1000/oz, the ratio is currently at 62:1. In order for that ratio to come back into its historical range, silver would have to jump to over $65/oz.