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Silver has been a form of money and store of value for more than 4,000 years. Our nations founders used Spanish coinage AKA pieces of eight to anchor American currency. However, it lost its role as legal tender when the use of the silver standard came to a final end in 1935.

Currently, the main demand for silver is industrial uses including: appliances, electronics such as solar cells and RFID tags and medical uses such as silver-based bio-cide and nano-particles to deliver silver ions. Silver as an investment accounts for just over 10% of the world’s supply. Thus, investors must keep a close watch on industrial breakthroughs and seasonal peaks and valleys associated with buying jewelry.

Stability vs Volatility

These fluctuations affect the silver market much more than gold because it is smaller. A market’s size and scope determine it’s stability. For example, the price has spiked radically twice in recent years. Once in 1979, when sons of a Texas oil billionaire were accused of trying to corner the market and again after the 2008 crash during conflicts between President Obama and the Tea Party movement. In 1979, the price jumped 749%! Conversely, it fell 50% in four days in 1980.

Importantly, silver’s wide array of uses makes it a stable investment always. Somewhere, someone will need more and usually in very large quantities. The wide array of industrial uses also creates a mitigating factor to the whims of investors and love struck suitors. Increasingly, there will be more and more utilitarian applications. Likewise, as the demand and uses for silver increase, so will it’s value.

Looking through this, we can see that the same things that create volatility may also create stability. Industry can have a great effect but the causes are predictable. Most of the great technological innovations today are taking place in plain sight. Likewise, the human factor is not a fickle as it seems. Commodities brokers and traders often cite predictable trends similar to livestock and produce. Ultimately, trends can make a few bucks here or there but precious metals will likely survive as treasured investments…forever.