Unlike gold – where 75% of what’s mined annually is used for jewelry – silver is mostly used for industrial purposes.
Indeed, 75% of the silver that’s mined annually is used for industry. It’s not surprising, given silver’s electrical and thermal conductivity, as well as corrosion resistance.
And when you take a closer look, you can see that a rapidly growing number of industries – from electronics to medicine – are taking advantage of silver’s unique properties.
Indeed, silver can now be found in our smartphones, TVs, laptops, automobiles – even the Pentagon’s C17s and Apache helicopters.
It’s also used in batteries that can function at high temperatures in very deep oil and gas wells…
Hecla Mining (HL) CEO, Phil Baker, compares the current period to the turn of the 20th century when the photography industry completely changed the silver market.
At the time, demand from photography grew to account for 50% of overall silver demand.
Today, Baker says the only difference is that we won’t be seeing a single industry grow rapidly, but a myriad of industries that will increase their demand for the precious metal.
The Silver Institute agrees. It forecasts that silver demand for industrial purposes will increase 36% by 2016.
Silver As An Investment
Investment demand is growing strongly, as well – especially compared to the gold market.
Consider that in 2013, the price of gold decreased, mainly due to liquidations in holdings from exchange-traded products (ETPs).
However, silver ETPs – such as the ETFS Physical Silver Shares (SIVR) – saw inflows instead of outflows in 2013. Silver holdings for ETP holdings at the end of 2013 hit nearly 623 million ounces – versus the 608.2 million ounces held at the start of 2013.
The trend continued into 2014, too, with silver ETPs leading all commodity ETPs in inflows.
Physical demand for silver in the form of coins was also extremely strong in 2013 – and has continued into 2014.
Last year, the U.S. Mint set a record for sales of American Eagle silver coins at 42,675,000 coins – 26% more than it sold in 2012. And March 2014 sales were the fourth highest on record at 5,354,000 silver coins.
Sales might have been even higher, except that the Mint is rationing sales due to its inability to obtain enough silver blanks.
Bottom line: Don’t make the mistake of ignoring silver’s potential. Its industrial applications and ability to act as a store of value make it a very unique investment to consider when trying to protect your wealth.
And “the chase” continues,