Silver may be beautiful, but it isn’t just valuable for aesthetic reasons!
In this article, we will briefly discuss the variety of reasons silver is valuable. For jewelry lovers, retail store owners this should be interesting and provide a little insight into the factors behind broader price fluctuations.
Silver commodity traders will also benefit from understanding the catalysts that can impact price action a well, although this is secondary!
What may be surprising to some is that silver has a number of industrial uses that contribute to its value, in addition to its having been used as a currency in the past and turned into treasured jewelry.
Silver was used as currency in ancient Greece and in ancient Persia and continued to be crafted into British pennies till the end of the 18th century. Even if one were to argue that silver has no ‘inherent value,’ (which it does), it was a commodity used to facilitate trade and was further legitimized as official currency in a number of countries.
This brings us to ask ‘what truly makes something valuable?’
The value of something in reality is always what someone is willing to pay for it.
Silver’s inherent value came from its beauty and this has of course been considerably enhanced through silversmithing. As an ore when used alone silver remained too malleable. It was not until the 12th century when sterling silver was made in Europe. Silversmiths introduced a bit of melted copper to the concoction to reduce silver’s natural malleability.
In another article, we address the difference between pure silver and sterling silver. To summarize it here for buying and selling (messaging) purposes, sterling silver is not necessarily lower quality silver. It is a mixture of silver with stronger alloys like copper to add to the durability of the jewelry. Note that this is completely different to crafting jewelry with silver plating and a copper interior, which is often intended to scam buyers, unless they are aware of the silver to alloy ratio.
Coins as Currency
But in addressing the question of using silver coins as currency, this actually made more sense in a way than using paper currency, due to the widespread understanding that silver has at least some inherent value.
The only reason that paper currency is supposed to theoretically have value is that it is backed by a country’s gold and silver reserves. Yet, pegged currency values have long since veered from having any relation to commodity reserves. So, paper money now has value simply because people continue to treat it as such.
And now that money is becoming increasingly ephemeral, where for instance a federal authority can simply generate billions of dollars electronically – as well as with the competition national currencies are increasingly getting from bitcoin and other cryptocurrencies – our conception of money is about as far from tangibility as it ever has been.
So, in times like these commodities gain value. Aside from silver’ inherent value that led to its becoming currency, it has found many uses in fashion – to go into this almost requires asking the question – what actually is the value of fashion?
Marketers, designers, silversmiths and business owners have been preoccupied with this question for many years, simply as a means of better understanding how to encapsulate that value and express it to retailers and potential customers. Designers and silversmiths do so to try to understand aesthetics.
How does one re-shape silver into something more beautiful than it was before, that now has more inherent value, that abides by the classic principles of aesthetics and fashion or that fits a particular more temporal fashion interest? How does the way that a particular piece of jewelry goes with other outfits add value to it as well?
Of course, when it is taken out of the ground, silver is often mixed with many different ores. It takes a lot of work to separate it from other metals, initially.
The Cultural Value of Silver
Meticulously designed silversmithing is not just gorgeous in and of itself, but often also represents something deeper – a tradition, a culture, something of religious significance, representing the gods, astronomical observances or principles. Jewelry has been an important part of indigenous Latin American rituals, a sign of one’s role in society and yes, of course, of wealth.
Indigenous jewelry can be found in museums. Some try to recreate indigenous Mexican jewelry. Meanwhile, echoes of these styles are also still alive, both consciously and unconsciously, in the work of artists who consider their jewelry more contemporary.
But aside from style and culture, jewelry also clearly is intended to convey wealth. In a world where having the latest phone can be considered a status symbol, of course, the same would be true of pretty metals. Wearing an expensive piece of jewelry almost certainly means that you have your food and lodging taken care of, at least we hope so!
Let’s not forget other elements of value to silver. Jewelry is often passed down in a family over generations, becoming a heirloom and taking on special significance, far more subjective and personal.
In other cases, a piece of jewelry may have a story behind it that adds value. Maybe it contains a gemstone from a special, hard to get to, location and the wearer understands not only how it was mined but the geography behind how the gemstone itself was formed over the course over one billion years (literally). In other cases, the story may involve sustainable mining or contributions to an economy where individuals may be struggling.
In another article, we take a closer look at sustainable jewelry brands, sustainable mining and silversmithing methods. It isn’t just paintings that can be story pieces.
Jewelry can serve this purpose as well. In addition to the good one can do in the world through ethical consumption, the story behind a piece of jewelry can also serve as a useful conversational piece!
Industrial Demand for Silver
So, we’ve covered silver for use as currency and jewelry. What about the use of silver for industrial purposes? This accounts for about half of the world’s demand for silver.
So, the use of silver in industry, along with that growth and decline, also significantly impacts how much silver is worth. Silver has more industrial uses than gold, so the industrial use of silver has a far greater impact on its price than does the industrial use of gold on gold prices.
But speaking of silver, we begin with the basic uses. Silver tableware and silver jewelry remain popular. However, it is silver’s malleability and high electricity and heat conductance that make it even more valuable. Silver is also used to make batteries, LED chips, nuclear reactors, medicine, brazing alloys and solar panels, and there are many other uses.
Meanwhile, photovoltaic panels require silver as well. Silver demand for this purpose skyrocketed when governments around the world prioritized and subsidized solar panel technology and the companies working in and making innovations in this area. Higher demand contributed to the price of silver hiking, but only temporarily, as this in turn led to increased focus on creating new solar panel technology with reduced silver needs.
Silver also has special antibacterial qualities that makes it useful for storage of potable liquids (please do not try this), reducing the spread of sickness and disease. These qualities have made silver useful for medical purposes, but much of silver use was later replaced by later widespread use of antibiotics.
The film industry once used quite a bit of silver, as it’s needed for photography. However, this demand has declined significantly due to the increased dependence on digital cameras and CGI technology.
Silver has a number of uses in nanotechnology as well.
So, if you’re tracking the price of silver long or short term, be sure to consider catalysts that stem from its industrial use as well.
Santa Prisca Silver is a wholesale silver dealer based in Taxco, Mexico. Our shipping to the US is free and takes up to five business days. Feel free to reach out to us using the form below if you have any questions or would like to learn more about how we work.