The Silver Commodity
Silver has been a key item in the trade and commerce of humanity for thousands of years. It is a precious metal: a mined ore that is in demand due to its scarcity. Silver is not as rare as gold or platinum, but it is still reliably scarce for a number of different reasons. The mined silver can be melted down into varying shapes. Usually, when people buy silver bullion, it is in the form of bars or coins—easily stored and transported.
Silver has been used as money in commerce for thousands of years. Until the Twentieth Century, many forms of currency used silver as a backing to ensure its value. The United States and other countries sometimes offered silver certificates, paper currency that could be traded for silver based on the denomination marked on it. Since then, however, the silver standard has been abandoned in most parts of the world as a form of legal tender. However, silver is still scarce and coveted enough that it is in demand and traded as a commodity on the world market.
Silver is used in industry because of some unique properties specific to silver. Many times, this usage destroys the silver, reducing the amount of actual silver left on Earth. It is estimated that the overwhelming majority of silver ever to be mined has actually been consumed and no longer available for collection. As a result, silver is increasingly becoming more precious, creating a very stable commodity going forward.
Silver shaped for sales and investments is known as bullion. Most bullion is found in the forms of bars and coins. Bars are larger quantities made in a flat form that makes it easy to stack, store, trade, and transport. Coins are usually marked with legal tender status from their minting government (those not so marked or created by non-government sources are known as “rounds”). Being marked as legal tender protects coins with counterfeiting and fraud laws. Usually, however, these coins are worth much more than the value stamped on them; the intrinsic metal will sell for more than the monetized price.
Coins are interesting because they are also wanted by numismatists, collectors of currency such as coins. This market is usually separate from the metal market. Sometimes, a coin that is sufficiently rare or special can be worth several times or more worth its metallic cost. With coins that normally cost a couple of thousand dollars in rare metals, extremely rare specimens have sold for millions.