Why Gold & Silver?

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Updated: 2015-09-25 - 15:49:00

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Role of Silver in Society

Demand for silver is built on three main pillars: industrial uses, photography and jewelry & silverware. Together, these three categories represent more than 95 percent of annual silver consumption.

Sparkling tableware, shining jewelry, and living spaces brightened by silvered mirrors are the obvious contributions of silver to our daily lives. It is, however, the silver behind the scenes that makes our modern world function more efficiently. Inside switches, silver contacts efficiently and safely turn on and off the powerful electric current that flows into our homes, our lamps and our appliances. It is silver under the keys of computer keyboards, behind automobile dashboards, and behind the control panels of washing machines or microwave ovens that switch on or off at the touch of the finger. And inside the 220-volt line circuit breaker boxes in our homes or inside the 75,000-volt circuit breakers in power stations, silver performs safely and steadily to switch on or off our most dependable servant, electric power, throughout our lives.

Silver has been a multifaceted asset throughout history. It was found as a free metal and easily worked into useful shapes and was widely used by early man. The beauty, weight and lack of corrosion made silver a store of value, and hence one of the earliest of metals to be used as a medium of exchange.

The early discovery that water, wine, milk and vinegar stayed pure longer in silver vessels, led to its desirability as a container for long voyages. Herodotus wrote that Cyrus the Great, King of Persia, a man of vision who established a board of health and a medical dispensary for his citizens, had water drawn from a special stream, "boiled, and very many four wheeled wagons drawn by mules carry it in silver vessels, following the king wheresoever he goes at any time."

In more contemporary times, when the first telegrapher tapped out his code in 1832, silver was the electrical contact that made the current flow. Earlier that century, when Joseph Nicephore Niepce created the first photographic image obtained through a camera-like device in 1813, it was silver nitrate that made it possible. Finally, when the German obstetrician, Dr. Carl Crede made his medical breakthrough in 1884 to halt the diseases that caused blindness in generations of children at birth, it was silver that killed the viruses.

Today, modern technology has revealed an even more remarkable range of electrical, mechanical, optical, and medicinal properties that have placed silver as the key metal in many applications.

As a Store of Value

Silver has been used as a medium of exchange since ancient times (see Genesis 23:16). It was not until the reign of Croesus (560-546 B.C.), king of Lydia (in Asia Minor), that silver was stamped as official coinage.

Throughout history, silver coins were, and still are in many places, essential for internal and international trade. The Spanish reales (also containing 0.8 oz.. silver), minted in Mexico and Peru, were used throughout the Americas for generations. And nearly 400 million of the 1780-dated Austrian Maria Theresa thalers (containing 0.8 oz. silver) have been struck over the past two hundred years to serve as trade coins in Europe and Asia.

In 1792, Alexander Hamilton, then the U.S. Secretary of the Treasury, proposed the adoption of a gold and silver based monetary system. Silver remained in circulating U.S. coins until the supply of silver could not meet the demand for coins and the face value of the coin fell below it's bullion, or meltdown value. The U.S. government eliminated silver from quarters and dimes in 1965 and half dollars were reduced to 40%. In the U.S. today, silver is used only in bullion, commemorative and proof coins. Mexico is the only country currently using silver in it's circulating coinage.

During the past decade, the United States, Canada and Mexico began issuing pure silver coins with nominal face values sold at a small premium over their bullion value (not their face value). In 1982, Mexico began minting a 999-fine (99.9% pure) silver Libertad ranging in weight from 1/20 oz. of a ounce to 5 ounces. Over 20 million of the coins have been sold. The U.S. Mint issues a 999-fine Silver Eagle bullion coin (a one ounce bullion coin with a face value of $1). Over 165 million have been sold since 1986. The Royal Canadian Mint issues a 5 dollar 9999-fine silver bullion coin, the silver Maple Leaf. Over 13 million have been sold since 1986. Australia issues a 5-dollar, 1 ounce 999 fine silver bullion coin, the Kookaburra. Over 8 million have been sold since 1990.

Silver has Enduring Value:

Mankind’s timeless fascination with silver stretches back 6,000 years. As early as 700 B.C., the Mesopotamian merchants used silver as a form of exchange. Later, many other civilizations also came to recognize the inherent value of silver as a trading metal.

The ancient Greeks minted the drachma, which contained 1/8th of an ounce of silver; and in Rome, the basic coin was the denarius, weighing 1/7th of an ounce. And let’s not forget the English pound "sterling," originally denoting a specific weight of silver, which has come to mean excellence.

Today, millions of people throughout the world recognize silver’s intrinsic value and have made it popular as an affordable investment. In the United States, Individual Retirement Account (IRA) participants can invest a portion of their investment portfolio in silver bullion coins and silver bullion bars provided that they are of a fineness equal to or exceeding 99.9 percent silver.