The History of Silver
Since the discovery of silver over 4,000 years ago it has been used in many different forms of jewelry as well as in the production of currency in the form of coins. Up until 1968 the United States offered $1, $5 and $10 face value paper Silver certificates which could be redeemed for physical silver dollars. In 1968 they put a stop to this program and, today, you are no longer allowed to redeem any US Silver notes for physical silver. Today the only government to offer a silver Certificate program is Australia with it’s Perth Mint Certificate Program or PMCP.
The End of the Silver Standard
Since the end of the silver standard in the 20th century silver has been used more and more to produce physical silver bullion for investors. A good amount of the available silver supply today is currently used to make bullion bars, coins and rounds which are sold to precious metal investors seeking to protect their paper money assets against market fluctuations and inflation. Physical silver is also purchased by “survivalists” today who fear the current monetary system, which is backed only by faith, is set to fail. This group of people believe that the current paper money system is inevitably going to become worthless and precious metals such as silver will always be of some value.
Silver’s Industrial Applications
Not only has Silver been used as a form of currency in the past but it also has many industrial uses. Every year about 40% of the worlds Silver supply is used for industrial purposes. Silver is used in the production of components for solar panels, cell phones, and many other electronic devices due to its high electric conductivity as well as its resistance to corrosion.
Silver’s Medical Uses
Silver also has many medical applications due to it’s antimicrobial, anti-toxic properties. Because silver is a rare precious metal and has so many practical applications, it will always be in high demand and with most of this silver being un-recyclable and disposed of, it will only continue to become more rare.
Physical silver bullion today is most commonly available in the form of bars. Silver bars are rectangular in shape and are produced by private minting companies and refineries. They have become a favorite of investors seeking to take physical ownership of silver at the lowest prices in the marketplace.
Since silver bars are more common than other forms of silver bullion such as government minted coins, they carry low premiums over spot price. This enables Physical silver investors to get the most pure silver for their money.
Silver Bar Sizes
Silver bars are measured by the troy ounce which is 31.1 Grams and usually consist of .999 fine silver. Bars are most commonly produced in sizes of 1 ounce, 5 ounce,10 ounce, 50 ounce and 100 ounce while some mints also produce bars that are fractions of an ounce such as 1/2 ounce, 1/4 ounce and 1/10 ounce for investors seeking highly divisible forms of silver. Most silver bars come in sealed sheets or plastic cases, making them easy to stack and store.
Silver Bullion Rounds
While silver bars are a favorite of investors, most private mints also produce silver rounds which are very competitive in price to bars. Silver rounds are most commonly found in only 1 troy ounce sizes while occasionally they are produced in 5 ounce sizes and consist of .999 fine silver. Silver rounds come in tubes of 20 per making them very easy to stack and store.
Most rounds contain elaborate designs comparable to coins, and in some cases their designs are even modeled after the design on a coin, providing investors with a less expensive alternative.
Silver Bullion Coins
Though the silver standard is dead today, many governments currently mint silver bullion coins. Most silver coins contain 1 troy ounce of silver ranging from .999 to .9999 Fineness. Silver bullion coins generally have a face value which is unrelated to its silver melt value. Coins are usually more desirable to collectors than investors and their premiums vary based on supply and demand. Usually these coins contain elaborate designs and carry with them higher premiums over spot price compared to silver bars and rounds.
Exchange Traded Funds or ETF’s
Paper silver is a newer alternative to buying physical silver bullion. Paper silver enables investors to take ownership of and trade large amounts of silver without the hassle of storing bullion. This provides Silver investors with the opportunity to gain exposure in the silver market in a quick and easy way.
Silver Certificates are among the most common ETF’s on the market today. Certificates enable investors to openly buy and sell silver without the hassle of lugging around large volumes of physical silver bullion. As you can imagine it is much easier to store a paper certificate than it is to store tons of physical silver which offers silver investors with the opportunity to make quick and easy transactions based on the price of silver at any point in time.
Silver Trust Funds
Silver trust funds such as the IShares Silver trust or “SLV” as it is referred to in the stock market, enables investors to take ownership of it’s over 340 million troy ounce inventory without the hassle of having to store any physical bullion. This has become a favorite of investors seeking to gain exposure to the silver market without actually owning any physical silver.