How Much Is an Ounce of Silver

Identification

• An ounce of silver cost $5 in 2002 but its price has consistently increased in about two-year increments. In 2004, an ounce of silver cost $8. In 2006, an ounce cost $15. With the economic downturn of 2008, the trend reversed so that by December 17, 2008, an ounce of silver had fallen to $11.37.

Features

• The chemical symbol for silver is Ag. This comes from its Latin name, argentum. Its atomic number is 47. It is a metal that shines and conducts heat and electricity extremely well. Silversmiths can easily create silver wire as well as very thin-hammered sheets of silver. It has been considered a valuable metal, second to gold, since ancient times so it has been widely used to make coins and jewelry.

Size

• The United States once was the second-largest producer of primary silver, mining around 65 million troy ounces in 1989. (There are 12 troy ounces in a pound.) Mexico mined about 10 million more troy ounces of silver during the same year. By 2007, however, Peru had risen to the top global producer of silver with 112.3 million ounces and Mexico dropped to second. The United States dropped from its earlier position to become the eighth-largest producer of primary silver in 2007. According to the Silver Institute, 37.3 million ounces of silver were mined in the United States in 2007. Because silver is such a superior conductor of electricity and heat, there is such a great demand for it by industrial manufacturers that even when recycled silver is included, there is an insufficient amount of silver available. Between 1990-2003, the industrial deficit of silver was nearly 2,000 million ounces according to the records of CMI Gold &Silver.

Considerations

• Since 1986, the United States Mint has produced one-ounce silver coins called American Silver Eagles. These coins have a face value of one dollar each and contain 0.999 ounces of "fine silver bullion." Even though they are acceptable as legal currency, the Mint sells them for $5.40 each with a minimum order of 500 coins. In all the Mint has produced 165,000 Silver Eagles, which are not the same as "silver dollars."

Potential

• Investment advisers at CMI Gold &Silver recommend that people invest in silver because, they explain, in a bull market, the value of silver triples whenever the value of gold doubles. In other words, $1000 invested in gold will grow to be worth $2,000 in the same time that $1000 in vested in silver will grow to be worth $3,000. It is important to note, though that the space taken up by the gold is a lot less than that taken up by the silver. Their minimum order is five ounces of gold but 300 ounces of silver.