SILVER

Silver has long been valued as a precious metal, and it is used to make ornaments, jewelry, high-value tableware, utensils (hence the term silverware), and currency coins. Today, silver metal is also used in electrical contacts and conductors, in mirrors and in catalysis of chemical reactions. Its compounds are used in photographic film and dilute silver nitrate solutions and other silver compounds are used as disinfectants and microbiocides.The principal sources of silver are the ores of copper, copper-nickel, lead, and lead-zinc obtained from Peru, Mexico, China, Australia, Chile, Poland and Serbia. Peru and Mexico have been mining silver since 1546 and are still major world producers. Top silver-producing mines are Proaño / Fresnillo (Mexico), Cannington (Queensland, Australia), Dukat (Russia), Uchucchacua (Peru) and Greens Creek mine (Alaska).Most people know about the practical applications of silver, such as its use in jewelry, cookware and industrial products, but like gold, silver is also an actively traded commodity and can present investors with real profit potential. Like gold and other commodities, investing in silver is riskier than owning stocks and bonds, but that shouldn’t scare investors away from considering silver investments as part of their portfolios. And of course, there are silver stocks and exchange-traded funds (ETFs) available, too.

Silver futures are traded at the New York Mercantile Exchange and the Tokyo Commodity Exchange. The New York Exchange deals in dollars per ounce, and trades futures in 5000 troy ounce packages. The Tokyo Exchange uses the equivalent of 965 troy ounces and prices are listed in yen per gram.An important factor that silver investors continually tend to review is the gold/silver ratio. Investors use the ratio to evaluate the relative value of silver and to decide if it’s an optimal time to purchase gold or silver and how to diversify their precious-metal holdings.  Over the last 100 years the price of silver and the gold/silver price ratio have fluctuated greatly due to competing industrial and store-of-value demands.

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