What is Silver Used for? The History of Silver's Uses

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Contributor, Benzinga
October 20, 2023

Silver may not be as rare or expensive as gold, but it has a wide range of applications that make it a vital component of the global economy. This information can be useful if used to build a profitable investment thesis. This article delves into the evolution of silver through human history and how its uses influence its value as an investment asset.

What is Silver Used for Today?

Silver's versatile properties and affordability make it indispensable in numerous industries. Let's examine some of the key applications of silver in the modern world:

  1. Jewelry and silverware: Silver has been used for jewelry and tableware for centuries, thanks to its luster, malleability and antimicrobial properties.
  1. Electronics: Silver is the most conductive of all metals, making it ideal for electrical contacts, switches and printed circuit boards found in devices such as smartphones, computers and televisions.
  1. Photovoltaics: Silver is a critical component in solar panels, where it's used as a conductive material for solar cells, enhancing the efficiency of converting sunlight into electricity.
  1. Medicine: Silver's antimicrobial properties make it valuable in various medical applications, including wound dressings, medical devices and coatings for surgical instruments.
  1. Catalysts and chemicals: Silver is used as a catalyst in the production of ethylene oxide and formaldehyde, which are essential chemicals for manufacturing plastics, resins and other products.
  1. Investment and currency: Silver coins, bars and exchange-traded funds (ETFs) are popular investment vehicles, while silver has also been used as a form of currency throughout history.

The History of Silver's Many Uses

Silver has been valued for its beauty and utility since ancient times. Archaeological evidence from Anatolia (modern-day Turkey) suggests that it was used as far back as 3000 BCE. By 1200 BCE, the silver mines of Ancient Greece were helping the primitive nation flourish. In these early civilizations, the metal was used for jewelry, ornaments and religious artifacts, reflecting its cultural and aesthetic significance.

Silver was used as a bartering chip for about as long as people learned how to mine it, but it only became a widespread currency after silver coinage was invented. The Achaemenid Persian empire under Darius the Great minted the first silver coins called sigloi or shekels in about 600 BCE, according to Herodotus. 

Simple silver coins like the shekel were adopted by civilizations across the Mediterranean like the Ancient Greeks and were some of the earliest coins used in international trade.

Ancient Sea Turtle Silver Coin from the Island of Aegina, Greece circa 550-530 BCE:

Image Courtesy of the Classical Numismatic Group\

The Roman Empire relied heavily on silver coins for conducting trade and paying armies. The metal continued to be a favored choice for coinage during the Middle Ages in European countries, which helped to solidify its role in the global monetary system.

The discovery of the Americas brought the silver trade to the forefront and changed the world economy forever. This came at a time when the economies of China and India towered over Europe. Western nations didn’t have many goods that the east wanted enough to trade for their valuable goods like silk and porcelain. A massive influx of silver from the new world finally gave Europe the purchasing power it needed to make global trade with the east worth it for everyone. Some historians believe this to be the true birth of a global economy.

In the 19th and 20th centuries, the invention of photography brought about a new demand for silver, as it played a crucial role in the production of photographic film because of its light-sensitive properties. This marked the beginning of silver's widespread use in industrial applications.

With the advent of modern electronics in the mid-20th century, silver found a new niche because of its exceptional conductivity, resistance to corrosion and low price (compared to gold). Its adoption in electrical components, semiconductors and integrated circuits fueled a surge in demand, transforming silver into a vital element in the rapidly expanding electronics industry. 

What Influences the Price of Silver?

Several factors can impact silver's price and its appeal as an investment. These factors don’t always affect the price of silver in a predictable way, but they can be used to help build an educated estimate. 

Supply and Demand

The diverse range of silver's applications, from industrial to consumer goods, can influence its price. An increase in demand for electronics or renewable energy, for example, may drive up silver prices.

Market Uncertainty

Like gold, silver is considered a safe-haven asset during times of economic or political instability. Investors may turn to silver when other investments seem uncertain, which can impact its price.

Inflation

Silver can serve as a hedge against inflation, as its value often rises when the purchasing power of paper currency decreases.

Interest Rates

Lower interest rates can make silver more attractive, as the opportunity cost of holding non-yielding assets like silver decreases compared to income-generating investments such as bonds.

Industrial Production

Silver's price is sensitive to fluctuations in industrial production. An increase in manufacturing activity, particularly in sectors that heavily rely on silver, such as electronics and renewable energy, can drive up demand and consequently, the price of silver.

Mining and Geopolitics

Changes in silver mining output, discoveries of new silver deposits or geopolitical tensions in major silver-producing regions can influence the supply side of the equation, affecting the price of silver.

Currency Movements

As silver is priced in U.S. dollars, fluctuations in the value of the dollar can impact silver's price. A weaker dollar typically makes silver more attractive to investors holding other currencies, potentially increasing demand and raising its price.

How to Invest in Silver and Other Precious Metals

Are you convinced that investing in silver or other precious metals is a wise move? There are numerous ways to get started. One of the most reliable sources for purchasing these materials is through trusted dealers such as Advantage Gold, Red Rock Secured, American Hartford Silver and Birch Silver Group. Each one has an excellent track record when it comes to customer service, enabling direct delivery and IRA purchases plus providing a variety of products including gold bullion coins, rounds and bars in platinum.

Is Now a Good Time to Buy Silver?

The price of silver tends to depend more on supply and demand than gold and other precious metals. You can try to make an estimate of the future price of silver by taking a look at the factors above and predicting how they may affect the silver trade. 

Frequently Asked Questions

Q

What is the main use of silver?

A

The main use of silver is in various industries such as electronics, jewelry, photography, and silverware. It is also used in the production of solar panels and as a catalyst in chemical reactions. Additionally, silver has antibacterial properties and is used in medical applications such as wound dressings and surgical instruments.

Q

Why is silver so valuable?

A

Silver is valuable for several reasons. It is a precious metal that has been highly sought after for centuries due to its scarcity and aesthetic appeal. Silver is also widely used in various industries such as electronics, photography, and jewelry, which increases its demand and value. Silver also has unique properties that make it an excellent conductor of electricity and heat, further contributing to its value. Lastly, silver is often seen as a safe-haven investment during times of economic uncertainty, which drives up its price.

Q

Can silver hit $100 an ounce?

A

It is difficult to predict whether silver can hit $100 an ounce as it depends on various factors such as market demand, economic conditions, and geopolitical events. While silver prices can fluctuate significantly, reaching $100 an ounce would require a significant increase in demand or a substantial decrease in supply. It is always advisable to consult financial experts or conduct thorough research before making any investment decisions.

About Henry Stater

Henry is an expert in all things crypto. He stays up to date with all the latest coins, platforms and technologies in the field. He has particular expertise in the burgeoning decentralized finance ecosystem and loves trying out all the new platforms. He also always follows major events in other financial markets and geopolitics as a whole, especially when an event’s effects ripple through the crypto market.