While silver is often considered second to gold, it has unique properties that make it attractive as both a precious and industrial metal. The author seeks to shed light on the yellow metal by answering five key questions: How and where is silver extracted; how is silver used; how does silver compare to gold; what are silver’s supply and demand dynamics; and what are the differences between investing in physical silver, futures, and mining stocks.
Silver is a unique metal because it has properties of both a precious and industrial metal. This makes silver a useful portfolio holding, as it can potentially appreciate in environments where demand for precious metals is rising, such as during periods of heightened volatility, as well as in eras of strong economic growth, where industrial demand is expanding.
Silver bullion can be bought directly from precious metal dealers, who sell it at spot market prices. The advantage of physical ownership is that its value closely tracks the price movements of the broader silver market. This also allows owners to potentially physically possess the metal, giving them direct access to their investment.