Industrial Demand From Customers Set To Generate A Recovery In Silver Prices

May 22, 2011 - PRLog -- Following a shocking upward climb to almost $50 an ounce; silver prices have been walloped over the past several weeks - plunging to around $35 an ounce in trading yesterday. But regardless of this sharp decline, now isn’t the time to panic. After all, the U.S. Federal Reserve has given no indication that it plans to tighten monetary policy anytime soon, and as a result the dollar continues to weaken.

That bodes nicely for all precious metals, which serve nicely as a store of value. Moreover, silver has an additional trump card - its widespread use in business and manufacturing. Ask many people on the street to name the main factor silver is utilized for and they’ll reply, coins and jewelry. Obviously, silver is utilized for both of those issues. But coins and jewelry combined barely accounted for 30% of “fabricated” silver items in 2010 - and much less than 25% of total silver demand. Visit http://www.silverdollar.cc for more silver and gold tips.

Indeed, it was industrial use that accounted for the bulk of silver fabrication demand in 2010 - 487.four million ounces, up from 403.8 million ounces in 2009. That compares to just 167.0 million ounces for jewelry and 101.three million ounces for coins. Other main usage categories are photography (72.7 million ounces), and silverware (50.three million ounces).

That annual improve of 20.7% in industrial use reflects a steady rise in demand stretching back to 2001, interrupted only by a brief recession-induced dip in 2009. Demand also increased for silver use in coins (22.0%) and in jewelry (five.1%) last year, even though it declined in photography (down 8.3%), a reflection of the continued shift from film to digital cameras.

Overall, demand for all fabricated silver rose 12.78%, and total silver demand jumped 14.59%. Given the dramatic surge in industrial demand, the two key questions for silver investors are:

Precisely what's silver utilized for industrially; and
Can we anticipate the growth in demand to continue?
Let me answer those questions. Visit http://www.silverdollar.cc for more silver and gold tips.

The Driving Force Behind Silver Prices

Taking the second question initial, whether or not we can anticipate the growth in demand to continue, the answer is really a definite “yes.”

Silver has numerous distinctive physical properties that make it nearly impossible to substitute within the numerous industrial applications in which it's utilized:

It is powerful, however extremely malleable, so could be shaped into numerous forms.

It is really ductile, capable of becoming stretched into silver wire - or even silver thread.

It has natural anti-bacterial properties, generating it helpful for such issues as medical instruments and as a connecting agent in locations where contamination could be a issue, like joints in household copper piping.

It is a extremely efficient electrical and thermal conductor, generating it perfect for all kinds of circuits and connections.

Simply because it conducts instead of absorbs heat, it can endure extreme temperature ranges with out degrading or suffering cellular harm.

This makes it a superb soldering agent for joints that expertise rapid expansion and contraction because of alternating heat and cold.

It has a high sensitivity to light, however is also an outstanding reflector.

Humans usually discover it appealing, giving it broad appeal for ornamental uses.

These properties make silver virtually indispensable in numerous industrial processes and items.

Given its distinctive properties and uses, there’s small question that industrial demand for silver will continue to steadily climb, and also the possible for associated cost increases will also maintain investment demand on the rise - or, at the really least, offer a cushion against cost pullbacks that may threaten investment profits. Visit http://www.silverdollar.cc for more silver and gold tips.

Actually, you will find truly only two possible elements that could stall silver’s cost advance:

Recycling - Simply because the white metal is virtually indestructible and effortlessly reprocessed for new uses, silver recycling is really a rapidly growing business, with utilized X-ray and photographic film, old jewelry and fabrication wastes supplying the bulk of reusable silver.

Increased mining - Even though silver is fairly scarce, it's still probably the most plentiful of the precious metals - which assists explain why, even with the recent cost increases, it remains the least costly. Silver could be mined directly, and is frequently retrieved as a byproduct of the mining of gold, copper, lead and zinc. Mine production of silver totaled 735.9 million ounces in 2010, up 2.5% from 2009, with Mexico moving ahead of Peru as the world’s No. 1 silver producer (128.6 million ounces). A number of new silver discoveries had been announced in 2010, such as a especially wealthy discover in Argentina, which could assist that country move up from its No. 10 spot on the production list.

There’s also a substantial supply of silver bullion presently becoming held by industrial users and investors - maybe as a lot as 1 billion ounces - that might be converted to industrial use if required.

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