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Silver

Major Characteristics

  • Silver (Chemical Symbol-Ag) is a brilliant grey-white metal that is soft and malleable.
  • Silver has unique properties such as its strength, malleability, ductility, electrical and thermal conductivity, sensitivity, high reflectance of light, and reactivity.
  • The main source of silver is in lead ore, although it can also be found associated with copper, zinc and gold and produced as a by-product of base metal mining activities.
  • Secondary silver sources include coin melt, scrap recovery, and dis-hoarding from countries where export is restricted. Secondary sources are price sensitive.
  • Silver is unique amongst metals due to the fact that it can be classified as both a precious metal and an industrial metal.
  • Today, silver is sought as a valuable and practical industrial commodity and as an investment.
  • Silver is an important element of global monetary reserves.
  • It is an effective portfolio diversifier.

Global Scenario

  • Silver is predominantly traded on the London Bullion Market Association (LBMA) and COMEX in New York.
  • LBMA, as the global hub of over-the-counter (OTC) trading in silver, is its main physical market. Comex is a futures and options exchange, where most fund activity is focused.
  • Silver is invariably quoted in the US dollars per troy ounce.

Indian Scenario

  • India's silver demand averages 2500 tonnes per year, whereas the country's production was around 206.95 tonnes in 2010.
  • Nearly 60% of India's silver demand comes from farmers and rural India, who store their savings in silver bangles and coins.

Factors Influencing the Market

  • Economic events such as national industrial growth, global financial crisis, recession, and inflation affect metal prices
  • Commodity-specific events such as the construction of new production facilities or processes, unexpected mine or plant closures, or industry restructuring, all affect metal prices.
  • Governments set trade policy (implementation or suspension of taxes, penalties, and quotas) that affect supply by regulating (restricting or encouraging) material flow.
  • Geopolitical events involving governments or economic paradigms and armed conflict can cause major changes.
  • A faster growth in demand against supply often leads to a drop in stocks with the government and investors.
  • Silver demand is underpinned by the demand from jewellery and silverware, industrial applications, and overall industrial growth.
  • In India, the real industrial demand occupies a small share in the total industrial demand of silver. This is in sharp contrast to most developed economies.
  • In India, silver demand is also determined to a large extent by its price level and volatility.

Measurement / Weight Conversion Table

Convert from Convert To Multiply by
1 Moz Metric tons 31.103
1 Ton Troy ounces 32,511
1 Ton Grams 1,000,000