Silver is a commodity with a long history and a promising future, thanks to its dual role as an industrial metal and an asset offering a store of value. Fabrication demand for silver has increased steadily over the past several years with the development of new products and technologies that exploit its natural properties, particularly as a biocide and superior electrical conductor. More recently, demand for physical silver has been driven by investors, reflecting its traditional appeal, along with gold, as a safe haven investment in times of economic uncertainty.
Two thousand years ago, silver vessels were used to store water in order to keep it pure. Today we are still leveraging silver as an effective natural biocide in water purification, and there are many other innovative applications using silver in its microbial, paste, powder and fine wire form. These applications include: burn treatment, medical equipment and bandages, surfactants used on walls, floors and counters, and in clothing. Silver's superior electrical conductivity makes it a key component in the manufacture of switches, circuit boards, fuses, plasma displays and batteries used in many everyday devices. Silver also plays a role in the promise of alternative energy – solar-powered electricity. According to The Silver Institute, silver is used in 90% of all crystalline silicon photovoltaic cells, which are the most common type of solar cells. Silver's high degree of reflectivity also makes it useful to concentrate solar energy onto collectors containing salts, which when heated produce steam that run generators.
The current global financial uncertainty and economic contraction has caused silver's more recent demand to be driven by investors rather than manufacturers and consumers. As a precious metal, silver has become an investment of choice for those who recognize its traditional role as a safe haven asset. Since the advent of the first exchange traded fund (ETF) backed by physical silver in 2006, it has become easier for investors to make silver a part of their portfolios. While fabrication demand for silver has been impacted by the lower demand for the goods it is used in, silver demand by investors in the short term can be expected to continue. At Silver Standard, we remain committed to silver because we see long-term value in the promise for its demand in all forms, and the opportunity it presents for our shareholders.