See below for more on the uses and demands for Silver
Silver, as a rare metal, was a more desirable medium of exchange than beads, feathers, shells, and the like. Its use as a medium of exchange is known throughout all recorded history.
Silver has been widely used for many centuries for monetary and industrial purposes.
Until the late 19th century most nations were on a silver standard with silver coins forming the main circulating currency - silver being in greater supply and of less value than gold, thus being more practical for everyday payments.
As gold became more plentiful, however, silver was slowly replaced although it is still used in some circulating coins as well as in bullion coins for investors.
In the U.S., silver is used only in bullion, commemorative and proof coins. Mexico is the only country currently using silver in its circulating coinage. During the past decade, the United States, Canada and Mexico began issuing pure silver bullion coins with nominal face values sold at a small premium over their bullion value (not their face value).
In 1982, Mexico began minting a 999-fine (99.9% pure) silver ranging in weight from 1/20 oz. to 5 ounces with over 20 million coins being sold. The U.S. Mint issues a 999-fine Silver Eagle (a one ounce bullion coin with a face value of $1) bullion coin. Over 100 million of these have been sold since 1986. The Royal Canadian Mint issues a 5 dollar 9999-fine silver bullion coin, the silver Maple Leaf selling over 11.8 million coins since 1988. Australia has issued a 5-dollar, 1 ounce 99.9 fine silver bullion coins, the Kookaburra, Over 8 million of these have been sold since 1990.
The demand and consumption for 95% of the world's Silver are:
As with Gold, the main factor influencing the price of silver is supply and demand. In recent years demand has greatly outpaced supply, and this has resulted in a reduction of existing stocks to meet this demand. As the available sources decline, silver's price has continued to strengthen. Other factors influencing silver as a store of value and prices are inflation, value of fiat currencies, interest rates and the political climate.
Silver's unique strength, malleability and ductility, electrical and thermal conductivity, sensitivity to and high reflectance of light and the ability to endure extreme temperature ranges makes this a demanded commodity.
Jewellery and Silverware Silver possesses working qualities similar to gold but enjoys greater reflectivity and can achieve the most brilliant polish of any metal. To make it durable for jewellery, however, pure silver (999 fineness) is often alloyed with small quantities of copper. In many countries, Sterling Silver (92.5% silver, 7.5% copper) is the standard for silverware and has been since the 14th century.
The copper toughens the silver and makes it possible to use sterling silver for cutlery, bowls and other decorative items such as picture frames and batteries.
Batteries both rechargeable and disposable, are manufactured with silver alloys as the cathode. Although expensive, silver cells have superior power-to-weight characteristics than their competitors. The most common of these batteries is the small button shaped silver oxide cell (approximately 35% silver by weight).
Bearings electroplated with high purity silver have greater fatigue strength and load carrying capacity than any other type and are hence used in various hi-tech and heavy-duty applications.
Today's jet engines can deliver 35,000 to 100,000 pound thrusts under high-temperature conditions. Despite the far higher power and a far more rigorous internal environment, silver coated bearings continue to provide the superior performance and critical margin of safety for today's jet engines.
As an Electrical Conductor Silver is the best of all metals and is hence used in many electrical applications, particularly in conductors, switches, contacts and fuses. Contacts, a junction between two conductors that can be separated and through which a current can flow, account for the largest proportion of electrical demand.
Ordinary household wall switches, which normally carry high electric current for electrical appliances from irons to refrigerators, use silver. Silver is the metal of choice for switch contacts because it does not corrode, which would result in overheating, which could lead to fire. The U.S. electric switch market is on the order of $2.7 billion per year.
From the very earliest uses of electricity, silver has been the metal of choice for switch contacts because of its low contact resistance, high thermal conductivity, mechanical wear resistance, chemical stability (it does not corrode), low polymer formation (the build-up of an insulating carbon-polymer film over the contact as a consequence of arcing), and cost-effectiveness (it provides the longest functional life).
Medical Applications Increasingly, wound dressings and other wound care products incorporate a layer of fabric containing silver for prevention of secondary infections. Surgical gowns and draperies also include silver to prevent microbial transmission. Other medical products containing silver are catheters and stethoscope diaphragms.
Mirrors and Other Coatings Silver's unique optical reflectivity, and its property of being virtually 100% reflective after polishing, allows it to be used both in mirrors and in coatings for glass, cellophane or metals.
One out of every seven pairs of prescription eyeglasses sold incorporates silver. Silver halide crystals, melted into glass can change the light transmission from 96% to 22% in less than 60 seconds and block at least 97% of the sun's ultraviolet rays. The change is endlessly reversible.
Photography The photographic process is based on the presence of silver halide crystals suspended on an unexposed film, which, when exposed to light, are set in such a way that they are selectively reducible to metallic silver by agents called developers. Approximately 5,000 color photographs can be taken using one ounce of silver.
Although a wide variety of other technology is available, silver-based photography will retain its pre-eminence due to its superior definition and low cost. From its very outset, silver halide has been the material that records what is to be seen in the photograph. As little as 4 photons of light activate silver halides which amplify that incident light by a factor of one billion times. In today's photography, silver halides are coupled with dyes that bring the color of the world around us into permanent record. An estimated 145.8 million troy ounces of silver were used worldwide in 2006 for photographic purpose.