Public sentiment regarding silver as a hedge against inflation may be influenced by marketing campaigns from silver producers and affiliates.Silver, like all precious metals, may be used as a hedge against inflation, deflation or devaluation.Data from 2010 reveals that a majority of silver is being used for industry (487.4 million ounces), jewelry (167.0 million ounces), and investments (101.3 million ounces). Other new applications for silver include RFID tags, wood preservatives, water purification and food hygiene. Due to the properties of silver, it has a major role in the manufacturing of photovoltaics, RoHS compliant solder, clothing, and medical uses.This allows a large trader or investor to influence the silver price either positively or negatively. The silver market is considerably smaller than the gold market, with the London gold bullion market turns over 18 times more monetary value than silver.The price of silver is influenced by a variety of factors. By April 2011, silver had rebounded to reach a 31-year high at $49.21 per ounce on Apdue to concerns about monetary inflation and the solvency of governments in the developed world, particularly in the Eurozone. However, the price of silver plummeted 58% in October 2008, along with other metals and commodities, due to the effects of the credit crunch. As of March 2008, it hovered around $20 per troy ounce. The price of silver has risen fairly steeply since September 2005, being initially around $7 per troy ounce but reaching $14 per troy ounce for the first time by late April 2006, and the average price of the month was $12.61 per troy ounce. The average gold/silver price ratio during the 20th century, however, was 47:1. In 1792, the gold/silver price ratio was fixed by law in the United States at 15:1, which meant that one troy ounce of gold was worth 15 troy ounces of silver a ratio of 15.5:1 was enacted in France in 1803. In Roman times, the price ratio was set at 12 (or 12.5) to 1. The gold/silver ratio is the oldest continuously tracked exchange rate in history. The gold/silver price ratio is often analyzed by traders, investors, and buyers. The crustal ratio of silver to gold is 17.5:1. Silver often tracks the gold price due to store of value demands, although the ratio can vary. At times, this can cause wide-ranging valuations in the market, creating volatility. The price of silver is notoriously volatile compared to that of gold because of the smaller market, lower market liquidity and demand fluctuations between industrial and store of value uses. The price of silver is driven by speculation and supply and demand, like most commodities. However, "junk silver" coins, which were originally minted for circulation, can still be found in circulation, albeit rarely, and are common targets in the practice of coin roll hunting. While these bullion coins are legal tender, they are rarely accepted by shops. Millions of Canadian Silver Maple Leaf coins and American Silver Eagle coins are purchased as investments each year. The motivations for stacking silver varies between collectors. Ĭollectors of silver and other precious metals who collect for the purpose of investment (either as their sole motivation or as one of several) are commonly nicknamed stackers, with their collections dubbed as stacks. In 2011, the global silver reserves amounted to 530,000 tonnes.
In 2009, the main demand for silver was for industrial applications (40%), jewellery, bullion coins, and exchange-traded products.
Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. It has been regarded as a form of money and store of value for more than 4,000 years, although it lost its role as legal tender in developed countries when the use of the silver standard came to a final end in 1935. Silver may be used as an investment like other precious metals. Various examples of American coins used as silver investments, including pre-1964 circulating silver coins and American Silver Eagle bullion coins.
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