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Major Characteristics
- Silver (Chemical Symbol-Ag) is a brilliant grey-white metal that is soft and malleable.
- Silver has unique properties such as its strength, malleability, ductility, electrical and thermal conductivity, sensitivity, high reflectance of light, and reactivity.
- The main source of silver is in lead ore, although it can also be found associated with copper, zinc and gold and produced as a by-product of base metal mining activities.
- Secondary silver sources include coin melt, scrap recovery, and dis-hoarding from countries where export is restricted. Secondary sources are price sensitive.
- Silver is unique amongst metals due to the fact that it can be classified as both a precious metal and an industrial metal.
- Today, silver is sought as a valuable and practical industrial commodity and as an investment.
- Silver is an important element of global monetary reserves.
- It is an effective portfolio diversifier.
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| Demand and Supply Scenario |
- Silverware achieved an increase of 4.6%, owing to stock-related gains in India.
- Demand for coins and medals surged yet higher from 2008, rising by 20.7% to reach a new record high of 78.7 Moz (2,447 t) in 2009 on the back of strong investment demand.
- In 2009, implied net investment soared to 136.9 Moz (4,258 t), buoyed by safe haven concerns, which led to strong inflows into both ETFs and physical investment.
- Scrap supply continued to decrease in 2009 by almost 6% to 165.7 Moz, despite a strong recovery in prices over the year.
- Most notable increases were seen in Bolivia and Argentina (both +6.8 Moz) with by largest single decline coming from Australia (-9.4 Moz).
- Net government sales fell by just over one half to 13.7 Moz (426t) in 2009, primarily driven by lowest stock sales from Russia, coupled with the continued absence of any disposal from China and India.
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| Global Scenario |
- Silver is predominantly traded on the London Bullion Market Association (LBMA) and COMEX in New York.
- LBMA, as the global hub of over-the-counter (OTC) trading in silver, is its main physical market. Comex is a futures and options exchange, where most fund activity is focused.
- Silver is invariably quoted in the US dollars per troy ounce.
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| Indian Scenario |
- India's silver demand averages 2500 tonnes per year, whereas the country's production was around 206.95 tonnes in 2010.
- Nearly 60% of India's silver demand comes from farmers and rural India, who store their savings in silver bangles and coins.
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| Factors Influencing the Market |
- Economic events such as national industrial growth, global financial crisis, recession, and inflation affect metal prices.
- Commodity-specific events such as the construction of new production facilities or processes, unexpected mine or plant closures, or industry restructuring, all affect metal prices.
- Governments set trade policy (implementation or suspension of taxes, penalties, and quotas) that affect supply by regulating (restricting or encouraging) material flow.
- Geopolitical events involving governments or economic paradigms and armed conflict can cause major changes.
- A faster growth in demand against supply often leads to a drop in stocks with the government and investors.
- Silver demand is underpinned by the demand from jewellery and silverware, industrial applications, and overall industrial growth.
- In India, the real industrial demand occupies a small share in the total industrial demand of silver. This is in sharp contrast to most developed economies.
- In India, silver demand is also determined to a large extent by its price level and volatility.
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| Measurement |
| Weight Conversion Table |
| To convert from | To | Multiply by |
| 1 Moz | Metric tons | 31.103 |
| 1 Ton | Troy ounces | 32,511 |
| 1 Ton | Grams | 1,000,000 |
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