Because of the constant development in the technology, usage of silver also inflates. Like gold, silver is also one of the commodities that maintained its value in the market and is worth considerable as substitute to paper currency. The reasons for owning an ounce or more of silver are as follows:
Historic Monetary Metal
Hundreds of years ago, silver became the means for buying and selling. It was the money used by many countries for trading. It has the value that is sustained until today.
Silver is one of the undervalued products with a great upside potential. The ratio of gold and silver during the early years is 15:1, which means that in every 1 troy ounce of gold was worth 15 troy ounces of silver. However, the ratio varies because of the trend in supply and demand of silver.
Silver’s unique feature is that it has short position in the COMEX, but one of the largest. Bullion banks hold the largest short position in precious metal markets which include silver bullion. However, these short positions need to be covered eventually so the silver price will get a boost.
Industrial Usage of Silver
Silver’s primary use is industrial. New innovations are constantly emerging taking advantage of silver’s properties. Silver is widely used because it resists corrosion and oxidation. Aside from that it is also best as thermal conductor, so it is ideal in electrical applications.
Supply and Demand
The mining of silver is greatly affected by the demand. Everyone and any industry is a potential demand for the production of silver since it is widely used in jewelry and many industries. However, its supply is becoming lesser than the demand due to less pure silver producers. Mostly are mined for the development of other products and metals.