Silver Coin Commerce™

The Chinese Silver Panda is a series of silver bullion coins issued by the People’s Republic of China. The design of the panda is changed every year, and these are minted in different sizes and denominations, ranging from 0.5 troy oz. to 1 kilogram.

There is also a Gold Panda series issued featuring the same designs as the silver Panda coins.

History

The first silver Panda coins—issued in 1983, 1984 and 1985—were Proof quality, with a precious metal content of 27 gm. of .900 fine silver, and a diameter of 38.6 mm. Mintages were only 10,000 for each year. No silver Pandas were issued in 1986. The 1987 silver Panda coins were minted in Proof quality from 1 troy oz. of sterling (.925 fine) silver, with a diameter of 40 mm. There are several mints that produced silver Panda coins over the years, including but not limited to: Shenzhen, Shanghai and Shenyang. Unlike coins made by US mints that carry mintmarks to distinguish their origin, Chinese mints generally do not carry mintmarks. In certain years there are minor variations in the coin design—such as the size of the date, temple, etc.–that allow the originating mint to be determined. An example is 1996 where different mints produced coins with minor variations in the font size of the date on the obverse side of the coins.

Obverse

Depiction of the Temple of Heaven in the center with Chinese characters on top saying “中華人民共和國” meaning People’s Republic of China and the bottom the year of issue. If the issue is a commemorative issue, the theme will be marked here also.

Reverse

Different portraits of panda that changes every year (except for 2001 and 2002, which share the same design).

There are many varieties on the types of coins issued as follows:

1. Uncirculated
2. Proof
3. Gold Plated / Gilded (either side or both)
4. Colored (only obverse side known)
5. Privy marked for different distribution such as 2001 D (for domestic market)
6. Privy marked for commemorative issue, which can also be gold plated

 The official distributor in China for the silver and gold Panda coins is the China Gold Coin Corporation (CGCC), and since 1982 Panda America has been an official distributor in the United States.

In 2006, a flood of counterfeit 1-ounce silver pandas came onto the market, and were frequently encountered on eBay through sellers located in China, both BU and proof versions. Many of these were easily distinguishable from the real thing by the lack of a denomination, which all authentic legal tender silver Panda coins have. Although these counterfeits did not contain a significant amount of silver, they were marked with ’1 oz Ag .999′. Also, some do include the denomination, and are difficult to distinguish from a real one without weighing them, or comparing them to a known genuine coin.

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Reference: 

Krause, Chester L. and Clifford Mishler. 2005 Standard Catalog of World Coins: 1901–Present (32nd ed. ed.). Krause Publications.

Silver Libertad coins are  Mexican silver bullion coins.   Mexico is known for producing some of the largest silver coins in the world, which is highlighted by the Libertad. The coins are struck in pure 99.9% fine silver and are available in a variety of sizes, although they were initially launched in just 1 oz. That changed in 1991 when coins of 1/2 oz, 1/4 oz, 1/10 oz, and 1/20 oz sizes were added. 2 oz and 5 oz size was added in 1996. The latest addition was 1 kilogram size in 2002.      

Design

The design features, the Independence Angel against a backdrop of the “Lovers’ Peaks” twin volcanoes, Iztacc’huatl and Popocat’ptl. The volcanoes symbolize a prince and princess from two different Indian tribes, who fell in love but were later exiled. Also featured in the design are the fineness and amount of silver, the date, and the name of the issuing country, ‘Mexico’.  The center of the coin on the obverse features an eagle perched on a cactus holding a snake in its beak, surrounded by a wreath and the words ‘Estados Unidos Mexicanos’. Laid out around the circumference are different versions of this emblem.   

Minted by the Mexican Mint, the Mexican Libertad Onza became the first silver bullion coin to be minted in one ounce sizes. Originally called Onza, these Libertad Onza coins are legal tender, although no face value is displayed. The reverse image of the Angel of Independence is based loosely after the 50 Peso’s Winged Liberty.  

Obverse Design       

The obverse or heads side of the coin features an eagle battling a snake (Mexico’s national coat of arms), which is surrounded by a wreath and the words “ESTADOS UNIDOS MEXICANOS”. Encircling the center are ten eagle designs that have been used as National Emblems through the centuries, including one depicted in the 16th century Mendocino Codex.         

Libertad_Obverse

Reverse Design     Since 1996, the reverse or tails side of the coin features the famed winged angel design. The angel towers above a background of the volcanoes Popocatépetl and Iztaccihuatl.
Inscription surrounding the top include the numerical size following by “ONZA” for “ounce”, then “PLATA PURA” for “pure silver”, the year of issue, “LEY” and “.999″.       

Libertad_Reverse

General Coin Information

Mexican Libertad Silver Bullion Coins are struck annually for investors and collectors and were first minted in 1982. A beautiful winged angel design has been portrayed on the coin since its inception, but a re-design occurred in 1996 to “make it more attractive,” the Mexican Mint said. That design, which is still used today, depicts the spectacular Angel of Independence — an eight ton golden statue on top of a tall slender column in Mexico City.  The Mexican Libertad Silver Coin is Mexico’s treasure coin and is minted at Casa de Moneda de Mexico, which was established in 1536 and is the oldest mint in North America. These magnificent coins are struck in .999 fine silver and the proof editions are struck in very small quantities.  The one-ounce Libertad Silver Coin is deservedly popular with collectors and investors alike.       

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 References: 

• Information about Libertad Silver Series at Banco de México’s Web Page.
• worldmintcoins.com    

The Canadian Silver Maple Leaf is a silver bullion coin issued annually by the government of Canada. The coin has been minted by the Royal Canadian Mint (RMC) since 1988.

The face value of the 1 oz coin is 5 Canadian dollars, the highest among international silver bullion coins. The current market value of the coin is approximately 20 Canadian dollars. The purity of the coin is 99.99% silver, also the highest among other bullion issues which have a 99.90% standard.

The coin generally always features a maple leaf and generally consists of 1 troy ounce (31.1 g) of silver. Annual variations for the coin in past have included proof releases (1989 only), privy marks, a coloured maple leaf (with a design different from the regular maple leaf), holographic enhancements and several differing designs, such as a 2009 issue commemorating the 2010 Winter Olympics.

The one universal element in all silver maple leaf coins is the phrase “Fine Silver 1 oz Argent Pur” along the bottom of the obverse of the coin.

Several notable issues have been released over the life of the series. A single-issue 10 oz version was produced in 1998 to mark the 10th anniversary of the coin series. In 1999, all Silver Maple Leaf coins that were issued came with a privy mark to commemorate the 20th Anniversary of the RCM Maple Leaf Program. The following year, the coins featured a Privy Mark with Fireworks and the number 2000. Another Silver Maple Leaf was issued to commemorate the Millennium. The coins were double dated 1999 and 2000.

Silver Maple Leafs differ from their Canadian Gold and Platinum Maple Leaf counterparts in that collector demand generates prices well above and beyond bullion value. In particular, the 1996 and 1997 versions fetched very high prices due to limited mintages (for example, in 1997 just under 101,000 Maple Leafs were minted, in comparison with more than 1.2 million minted in 1999).

Some of the privy marked Maple Leafs were available only in Europe. For the first time in 2009, the Silver Maple Leaf coins were not packaged in Mylar by the Royal Canadian Mint. Due to the high demand, the Silver Maple Leaf was packaged in tubes of 25.

Obverse: The effigy of Queen Elizabeth II. There are three different versions, a young head version, an old head version, and an older head version. The year of issue and the face value of 5 dollars is also displayed on this side.

Reverse: Picture of a maple leaf. On some variations there are also a small privy mark on the lower half of the coin or colour enhancement.

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References:

The Peace Dollar is a silver United States dollar coin minted from 1921 to 1928, then again in 1934 and 1935. Early proposals for the coin called for a commemorative issue to coincide with the end of World War I, but the Peace Dollar was issued as a circulating coin. 

Designed by Anthony de Francisci, the Peace Dollar was so named because the word PEACE appears on the bottom of the coin’s reverse. It contains 0.77344 troy ounces of silver, and was the successor to the Morgan Dollar, which had not been regularly minted since 1904. With the passage of the Pittman Act in 1918, the mintage of dollar coins was enabled to start again. Prior to the design and acceptance of the Peace Dollar, the Morgan Dollar was minted again for one more year in 1921. 

After a six-year pause in minting, the Peace Dollar was again minted in 1934 and 1935. It was minted briefly in 1965 (dated 1964), but no examples of this issue were ever released to the public and the entire mintage was supposed to have been melted. The Peace Dollar is the last silver dollar minted for circulation in the United States. 

History

The biggest hurdle faced by proponents of the new coin was that no dollar coin had been minted for general circulation in the United States since 1904, the last year of the Morgan Dollar series. The demand for silver dollars was so low that vast quantities of Morgans were still sitting in bank vaults. That hurdle was overcome with the passage of the Pittman Act on April 23, 1918. Sponsored by Nevada Senator Key Pittman, the Pittman Act allowed the US government to melt as many as 350 million silver dollars, and then either sell the bullion or use it to produce subsidiary silver coinage. Additionally, the law required the government to mint replacement dollars for any that were melted, with domestically purchased silver. 

Production of the Peace Dollar commenced on December 21, 1921, and it was placed into circulation on January 3, 1922.  That same day, President Harding was presented with the first Peace Dollar. Roughly one million examples were struck before it was realized that the relief on the coin was so high that it was difficult to strike, and the dies used were breaking at a high rate. Also, the coins were nearly impossible to stack. The relief was lowered considerably starting with the 1922 issue.  That year more than 84 million Peace Dollars were struck, the highest mintage of the series. 

After the Peace Dollar, production of dollar coinage did not resume until the Eisenhower Dollar in 1971. That coin, however, has no silver content, except for some sold directly to collectors by the Mint. Likewise, the Susan B. Anthony, Sacagawea dollars, and Presidential dollars that have been minted since the Eisenhower dollar contain no silver, making the Peace Dollar the last true silver dollar struck for circulation.

Design

Anthony de Francisci’s design featured his rendition of Lady Liberty on the obverse. His wife, Teresa, was the model for the sculpture.  The font used is an example of the then-popular Art Deco style. This is exemplified by the inscription, “IN GOD WE TRVST,” which uses the Latin angular “U”. 

The original design for the coin’s reverse featured a Bald Eagle holding (or standing on) a broken sword, symbolizing peace. This design was interpreted as one of defeat, rather than peace, so Chief Engraver Morgan altered the design to replace the sword with an olive branch (itself a symbol of peace).  The eagle is perched on a rock, facing a group of the sun’s rays. 

The design of the Peace Dollar drew considerable criticism upon its release. A few of the elements of de Francisci’s design that drew negative commentary were the open-mouthed Lady Liberty and the Latinized spelling of “trust.” The negative response was sufficient enough that the US Mint issued a statement on February 9, 1922, stating that the coin would not be withdrawn.  In recent years, however, coin collectors have come to view the Peace Dollar as an attractive and desirable coin. 

Mints

Mintmarks appear underneath the word ‘One’ on the reverse, and include: 

• no mark (Philadelphia Mint in Philadelphia, Pennsylvania)
• D (Denver Mint in Denver, Colorado)
• S (San Francisco Mint in San Francisco, California)

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References

Marotta, Michael E. “The Peace Dollar”.

Reiter, Ed. “The Lady on the Dollar”.

Yeoman, R.S., A Guide Book of United States Coins

The Morgan Dollar is a silver United States dollar coin. These dollars were minted from 1878 to 1904 and again for one more year in 1921. The Morgan Dollar is named after its designer, George T. Morgan, who designed both the obverse and reverse of the coin. The dollar was authorized by the Bland-Allison Act of 1878. It has a fineness of .900(90%), giving a total silver content of 0.77344 troy ounces (24.057 grams) per coin.

HISTORY

The Comstock Lode, one of the greatest silver strikes in history, was discovered in Nevada in the late 1850s. The strike put downward pressure on silver prices worldwide. In 1878 Congress passed the Bland-Allison Act which required the Treasury Department to purchase large amounts of silver, and to strike it as coins. For reasons of economy, the Treasury chose to strike the silver as dollars.

When the dollar was minted in 1878, it was the first dollar issued for American commercial use since the last Seated Liberty Dollar of 1873. The Trade Dollar was minted during this time period but was intended to be used for trade in the Orient. The dollar was continuously minted until 1904 when the supply of dollars in circulation was high and there was an absence of silver bullion. Then in 1918, the Pittman Act called for over 270 million coins to be melted for silver content. In 1921, the coinage of the Morgan Dollar resumed for that year and was replaced by the Peace Dollar commemorative that would become standard issue. Since 1921, many Morgan Dollars have been melted. Melting has mostly occurred when silver prices escalated because these dollars yield silver bullion.

Caches of Morgan Dollars produced at the Carson City Mint were discovered and were sold to coin collectors by the federal government in the early 1970s. Many of these dollars were uncirculated and are called GSAs (named after the General Services Administration) and come in black plastic holders that mimic the holders used for proof silver Eisenhower dollars of the period. These have become collectible items within the GSA encapsulation.

MINTS

Mint marks appear underneath the tail feathers of the bald eagle on the reverse between the letters “D” and “O” in “DOLLAR”. Mint marks include:

• CC (Carson City Mint in Carson City, Nevada)
• D (Denver Mint in Denver, Colorado)
• O (New Orleans Mint in New Orleans, Louisiana)
• S (San Francisco Mint in San Francisco, California)

Note that the absence of a mint mark is indicative of a coin minted at the Philadelphia Mint in Philadelphia, Pennsylvania.

Grading Morgan Dollars

VF20 Very Fine: Two-thirds of hairlines from top of forehead to ear must show. Ear well defined. Feathers on eagle’s breast worn.

EF40 Extremely Fine: All hairlines strong and ear bold. Eagle’s feathers all plain but slight wear on breast and wing tips.

AU50 About Uncirculated: Slight trace of wear on the bust shoulder and hair left of forehead and also on the breast and top edges of wings.

MS60 Uncirculated: No trace of wear. Has full mint luster but may be noticeably marred by scuff marks or bag abrasions.

MS63 Select Uncirculated: No trace of wear, full mint luster, few noticeable surface marks.

MS64 Uncirculated: Shows a few scattered contact marks. Good eye appeal and attractive luster.

MS65 Choice Uncirculated: Only light scattered contact marks that are not distracting. Strong luster, good eye appeal.

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I read an article yesterday about yet another use for silver in the future. It seems that they are coming up with more uses for this versatile metal all the time. The latest is the use of silver in ultra-thin flexible touch screens that can be rolled up.

Imagine being able to roll-up your laptop like a Sunday newspaper. Nanotechnology makes that possible and would make laptop computers even more convenient to carry around. This technology can also be applied to solar panels so they could be rolled out on rooftops or wherever needed.

NANOTECHNOLOGY

Nanotechnology is the study of the controlling of matter on an atomic and molecular scale. Generally nanotechnology deals with structures sized 100 nanometers or smaller in at least one dimension, and involves developing materials or devices within that size.

The size, or lack of, a nanometer is mind boggling to me. A nanometer is equal to one billionth of a meter. Imagine taking a meter stick and cutting it up into 10,000 or 100,000 pieces. It is hard to grasp. Then expand that out into a million, then 500 million, and onto a billion pieces that get so small that it takes a 10,000X microscope to get a good look at them.

TOUCH SCREENS

These cheap, flexible touch screens made with silver and gold nanowires could be available soon in cell phones, computers, and more. The same technology could even be used in solar panels.

It’s a roll-to-roll process similar to printing newspapers, that makes it extremely fast and able to be done at very low cost.

Today, most touch screens and solar panels are glass-based. The hard, insulating glass helps protect and support the thin coating of electrically conductive metals. But glass is also brittle and heavy. When an object strikes a solar panel, or a person drops a cell phone, the glass can shatter.

Touch screens made from thin plastic coated with silver and gold would weigh less, take up less volume, be more flexible, and could be produced much more quickly than glass plates; up to 100 times faster in fact.

Even though the screens are made with silver and gold, they are still cheap. The total amount of precious metals in each screen is so small that it doesn’t significantly increase the price.

The connections between the silver nanowires are good, but the conductivity has been improved by fusing them together with tiny amounts of gold. They are also working on creating longer, thinner silver nanowires, which will make the screen even more transparent and improve conduction of electricity through them.

The thin metal mesh formed by the nanowires is flexible and sticks to a variety of materials. When applied to plastic, the material can be bent, flexed or dropped, and the screen won’t crack and will still conduct an electrical charge.

That’s a far cry from many glass-based touch screens, which have an unfortunate tendency to shatter on impact.

The silver nanowires could also be used as electrodes for solar cells that can turn light into electricity. Flexible silver and gold nanowire screens could replace the hard, glass-based electrodes.

Unlike many technologies that have a significant lag time between development and application, this technique could be used immediately. The same machines that produce tons of newspapers every day could instead assemble rolls and rolls of touch screens and electrodes for solar panels.

Several scientists agree that the consumers will likely soon see this research in a variety of devices. The products that come from this technology will indeed be very useful.

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 Reference:

Silver, Gold Makes for Cheap, Flexible Touch Screens

The American Silver Eagle is the official silver bullion coin of the United States. It was first released by the United States Mint on November 24, 1986. It is struck only in the one-troy ounce size which has a nominal face value of one dollar and is guaranteed to contain one troy ounce of 99.9% pure silver. It is authorized by Title II of Public Law 99-61 (Liberty Coin Act, approved July 9, 1985). Its content, weight, and purity are certified by the United States Mint. In addition to the bullion version, the United States Mint has produced a proof version and an uncirculated version for coin collectors. The Silver Eagle has been produced at three mints: the Philadelphia Mint, the San Francisco Mint, and the West Point Mint. The American Silver Eagle bullion coin may be used to fund Individual Retirement Account investments.

Design

The design on the coin’s obverse was taken from the “Walking Liberty” design by Adolph A. Weinman which originally had been used on the Walking Liberty Half Dollar coin of the United States from 1916 to 1947. As this iconic design had been a public favorite—and indeed one of the most beloved designs of any United States coinage of modern times, silver or otherwise—it was revived for the Silver Eagle decades later. The obverse is inscribed with the year of minting or issuance, the word LIBERTY, and the phrase IN GOD WE TRUST.

The reverse was designed by John Mercanti and portrays a heraldic eagle behind a shield; the eagle grasps an olive branch in its right talon and arrows in its left talon, echoing the Great Seal of the United States; above the eagle are thirteen five-pointed stars representing the Thirteen Colonies. The reverse is inscribed with the phrases UNITED STATES OF AMERICA, 1 OZ. FINE SILVER~ONE DOLLAR, and E PLURIBUS UNUM, as well as the mintmark if applicable.

Value

American Silver Eagle bullion coins carry a face value of one dollar. This is their legal value reflecting their issue and monetization as coins. The coins are legal tender for all debts public and private at their face value of one dollar. This face value does not reflect their intrinsic value which is much greater and is dictated by their silver content and the metal’s spot price.

Mintages, and thus prices, of bullion, proof, and uncirculated Silver Eagle coins have varied widely, and the potential collector is advised to check a standard reference book before buying them. Generally, the bullion versions have been minted in the millions, while the proof and uncirculated versions were issued in the hundreds of thousands each. Most dates of the bullion issue are not particularly expensive (around $20 as of early 2010) and are traded at a small premium above the intrinsic value of the silver they contain; most proof versions (around $55–$60 as of 2010) and uncirculated versions (around $25–$90 as of 2010) sell for more. Some issues sell for significant sums, for example the 1995-W proof ($3,500 as of 2010) and the 2006 20th anniversary set containing a special “Reverse Proof” coin along with a regular proof coin and the new “Burnished Uncirculated” coin (over $300 as of 2010).

References:

“Publication 590: Individual Retirement Arrangements”. United States Department of the Treasury, Internal Revenue Service. 

“United States Mint Offers New ‘Legacies of Freedom’ Set”. United States Mint.

The Official Red Book: A Guide Book of United States Coins: 2011 (64 ed.). Atlanta: Whitman Publishing.

More Investment vehicles

Certificates

The U.S. dollar has been issued as silver certificates in the past, each one represented one silver dollar payable to the bearer on demand. The notes were issued in denominations of $10, $5, and $1 and can no longer be redeemed for silver.

Accounts

Most Swiss banks offer silver accounts where silver can be instantly bought or sold just like any foreign currency. Unlike physical silver, the customer does not own the actual metal but rather has a claim against the bank for a certain quantity of metal. Many digital gold currency providers, such as GoldMoney, offer silver as an alternative to gold and work on a similar principle. Other electronic silver accounts include the eLibertyDollar and Phoenix Silver. Silver accounts are backed through unallocated or allocated silver storage. (Note: both eLibertyDollar and Phoenix Silver have shut down.)

Derivatives, CFDs and spread betting

Derivatives, such as silver futures and options, currently trade on various exchanges around the world. In the U.S., silver futures are primarily traded on COMEX (Commodity Exchange), which is a subsidiary of the New York Mercantile Exchange. In November 2006, the National Commodity and Derivatives Exchange (NCDEX) in India introduced 5 kg silver futures.

Firms such as Cantor Index, CMC Markets, IG Index and City Index, all from the UK, provide contract for difference (CFD) or spread bets on the price of silver.

Mining companies

These do not represent silver at all, but rather are shares in silver mining companies. Companies rarely mine silver alone, as normally silver is found within, or alongside, ore containing other metals, such as tin, lead, zinc or copper. Therefore shares are also a base metal investment, rather than solely a silver investment. As with all mining shares, there are many other factors to take into account when evaluating the share price, other than simply the commodity price. Instead of personally selecting individual companies, some investors prefer spreading their risk by investing in precious metal mining mutual funds.

Taxation

In many tax regimes, silver does not hold the special position that is often afforded to gold. For example, in the European Union the trading of recognized gold coins and bullion products is VAT exempt, but no such allowance is given to silver. This makes investment in silver coins or bullion less attractive for the private investor, due to the extra premium on purchases represented by the irrecoverable VAT (charged at 17.5% in the United Kingdom and 19% for bars and 7% for bullion products with face value, e.g. US Silver Eagle and Maple Leaf, in Germany).

Other taxes such as capital gains tax may apply for individuals depending on country of residence (tax status) and whether the asset is sold at increased value.

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Types of Investment vehicles

Bars

A traditional way of investing in silver is by buying actual bullion bars. In some countries, like Switzerland and Liechtenstein, bullion bars can be bought or sold over the counter at major banks.

Physical silver, such as bars or coins, may be stored in a home safe, a safe deposit box at a bank, or placed in allocated (also known as non-fungible) or unallocated (fungible or pooled) storage with a bank or dealer.

Various sizes of silver bars:

• 1000 oz troy bars – These bars weigh about 68 pounds avoirdupois (31 kg) and vary about 10% as to weight, as bars range from 900 oz to about 1,100 oz (28 to 34 kg). These are COMEX and LBMA good delivery bars.
• 100 oz bars – These bars weigh 6.8 pounds (3.11 kg) and are among the most popular with retail investors. Popular brands are Engelhard and Johnson Matthey. Those brands cost a bit more, usually about 40 cents to 2.00 dollars per troy ounce above the spot price, but that price may vary with market conditions.
• Odd weight retail bars – These bars cost less and generally have a wider spread, due to the extra work it takes to calculate their value and the extra risk due to the lack of a good brand name.
• 1 kilogram bars (32.15 ozt)
• 10 ozt bars and 1 ozt bars (311 and 31.1 g)

Coins and rounds

Buying silver coins is another popular method of physically holding silver. One example is the 99.99% pure Canadian Silver Maple Leaf. Coins may be minted as either fine silver or junk silver, the latter being older coins with a smaller percentage of silver. U.S. coins 1964 and older (half dollars, dimes, and quarters) are 25 grams per dollar of face value and 90% silver (22½ g silver per dollar). (All 1965-1970 and one half of the 1975-1976 Bicentennial San Francisco proof and mint set Kennedy half dollars are “clad” in a silver alloy and contain just under one half of the silver in the pre-1965 issues.)

Junk-silver coins are also available as sterling silver coins, which were officially minted until 1919 in the United Kingdom and Canada and 1945 in Australia. These coins are 92.5% silver and are in the form of (in decreasing weight) Crowns, Half-crowns, Florins, Shillings, Sixpences, and threepence. The tiny threepence weighs 1.41 grams, and the Crowns are 28.27 grams (1.54 grams heavier than a US $1). Canada produced silver coins with 80% silver content from 1920 to 1967.

Other hard money enthusiasts use .999 fine silver rounds as a store of value. A cross between bars and coins, silver rounds are produced by a huge array of mints, generally contain a troy ounce of silver in the shape of a coin, but have no status as legal tender. Rounds can be ordered with a custom design stamped on the faces or in assorted batches.

Exchange-traded funds

Exchange-traded funds (or ETFs) represent a quick and easy way for an investor to gain exposure to the silver price, without the inconvenience of storing physical bars. The silver ETFs are:

• iShares Silver Trust (NYSE: SLV), launched in April 2006 by iShares.
• ETFS Silver Trust (NYSE: SIVR), launched in July 2009 by ETF Securities.
• Central Fund of Canada (TSX: CEF.NV.A, NYSE: CEF), which has 45% of its reserves held in silver with the remainder invested in gold.
• In September 2006 ETF Securities launched ETFS Silver (LSE: SLVR), which tracks the DJ-UBS Silver Sub-Index, and later in April 2007 ETFS Physical Silver (LSE: PHAG), which is backed by allocated silver bullion.
• PowerShares DB Silver (AMEX: DBS), holds its worth in futures contracts for physical delivery, which are later sold to silver consumers in order to roll over expiring contracts to contracts further from expiration.
• ProShares Ultra Silver (NYSE: AGQ), seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London.

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Silver, like other precious metals, may be used as an investment. For more than four thousand years, silver has been regarded as a form of money and store of value. However, since the end of the silver standard, silver has lost its role as legal tender in the United States. (It continued to be used in dimes and quarter dollars until 1964, and half dollars until 1970 when the intrinsic value of the silver overtook the coins’ face values.)

Silver price

The price of silver has been notoriously volatile as it can fluctuate between industrial and store of value demands. At times this can cause wide ranging valuations in the market, creating volatility.

Silver often tracks the gold price due to store of value demands, although the ratio can vary. The gold/silver ratio is often analyzed by traders, investors and buyers. In 1792, the gold/silver ratio was fixed by law in the United States at 1:15, which meant that one troy ounce of gold would buy 15 troy ounces of silver; a ratio of 1:15.5 was enacted in France in 1803. The average gold/silver ratio during the 20th century, however, was 1:47. The lower the ratio/number;  the more expensive silver is compared to gold. Conversely,  the higher the ratio/number, the cheaper silver is compared to gold. Currently with spot gold at $1136.80/oz and spot silver at $17.70/oz the gold/silver ratio is at 1:64.3. So according to historical facts, silver is currently a bargain.

From September 2005 onwards, the price of silver has risen fairly steeply, being initially around $7 per troy ounce,  but reaching $14 per oz for the first time by late April 2006. The monthly average price of silver was $12.61 per troy ounce during April 2006, and the spot price was around $15.78 per troy ounce on November 6, 2007. As of March 2008, it hovered around $20 per troy ounce. However, the price of silver plummeted 58% in October 2008, along with other metals and commodities, due to the effects of the credit crunch. It has recovered since then, but has yet to surpass its pre-credit, crunch high of $20.92 per oz.

Factors influencing the silver price

Private and institutional investors

• From 1973 the Hunt brothers began cornering the market in silver, helping to cause a spike in 1980 of $49.45 per troy ounce and a reduction of the gold/silver ratio down to 1:17.0 (gold also peaked in 1980, at $850 per troy ounce). In the last nine months of 1979, the brothers were estimated to be holding over 100 million troy ounces of silver and several large silver futures contracts. However, a combination of changed trading rules on the New York Mercantile Exchange (NYMEX) and the intervention of the Federal Reserve put an end to the game.
• In 1997, Warren Buffett purchased 130 million troy ounces (4,000 metric tons) of silver at approximately $4.50 per troy ounce (total value $585 million). On May 6, 2006, Buffett announced to shareholders that his company no longer held any silver.
• In April 2006 iShares launched a silver exchange-traded fund, called the iShares Silver Trust (NYSE: SLV), which as of April 2008 held 180 million troy ounces of silver as reserves. 

The CFTC publishes a weekly Commitments of Traders Report which shows that the four or fewer largest traders are holding 90% of all short silver contracts. Furthermore, these four or fewer traders were short a total of 245 million troy ounces (as of April 2007), which is equivalent to 140 days of production. According to Ted Butler, one of these banks with large silver shorts, JP Morgan Chase, is also the custodian of the SLV silver ETF. Some silver analysis has pointed to a potential conflict of interest, as close scrutiny of Comex documents reveals that ETF shares may be used to ‘cover’ Comex physical metal deliveries. This leads analysts to speculate that some stores of silver have multiple claims upon them.

The use of silver in items such as electrical appliances and medical products has increased since 2001. New applications for silver are being explored in batteries, superconductors and microcircuits, which may further increase non-investment demand. The expansion of the middle classes in emerging economies aspiring to Western lifestyles and products may also contribute to a long-term rise in industrial usage. Even so, due to the advent of digital cameras the enormous reduction in the use of silver halide-based photographic film has tended to offset this in the short term.

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