Silver: the metal, its uses and its long history as money
Silver is two things at once. It is an industrial raw material with physical properties no other metal quite matches, and it is one of the oldest forms of money. Understanding both sides helps explain why its price can behave differently from gold’s, and why people who own precious metals so often hold some silver alongside gold.
Silver as a metal
Silver is a chemical element with the symbol Ag, from the Latin argentum, and atomic number 47. It is a soft, white, lustrous metal that can be drawn into fine wire or beaten into thin sheets.
Its standout properties:
- the best electrical conductor of all metals, ahead of copper and gold;
- the best thermal conductor of all metals;
- the most reflective metal for visible light when polished, which is why it was long used for mirrors;
- antimicrobial behavior: silver ions inhibit the growth of many bacteria, a property used in some medical and consumer products.
Silver does not rust and resists attack by oxygen at ordinary temperatures. It does, however, react with sulfur compounds in the air, in food and in some materials such as rubber. The result is a thin layer of silver sulfide that darkens the surface: this is tarnish. It is a surface effect only and does not meaningfully reduce the weight of silver in a bar or coin.
Much of the world’s silver is not mined for itself but produced as a by-product of mining for lead, zinc, copper and gold. That matters for supply: a higher silver price does not automatically lead to more silver being mined, because output depends heavily on what is happening in those other metals.
What silver is used for
Unlike gold, a large share of the silver produced each year is consumed by industry, and much of it is never recovered.
| Use | Why silver |
|---|---|
| Electronics and electrical contacts | Unmatched conductivity and reliability in switches, connectors and circuits |
| Solar panels | Silver paste forms the conductive lines on photovoltaic cells |
| Brazing and soldering | Silver alloys join metals strongly at moderate temperatures |
| Jewelry and tableware | Bright color, workability and tradition |
| Medical and hygiene products | Antimicrobial properties |
| Photography (historically) | Silver halides react to light and formed the basis of film and photographic paper |
Photography was once a major source of demand. The move to digital imaging reduced it sharply, while electronics and solar applications have grown in importance.
For jewelry, pure silver is too soft for daily wear, so it is alloyed, usually with copper. Sterling silver is 92.5% silver, marked 925. It is the familiar standard for jewelry and cutlery, but it is not bullion: when sold, it is valued on its silver content less the cost of refining it.
Silver as money
For most of recorded history, silver was the metal of everyday money. Gold was too valuable for ordinary transactions; silver filled the gap. Many currency names still carry that legacy: the British pound began as a pound weight of silver, and in several languages the word for money is the same as the word for silver, as with the French argent.
Silver coins circulated across ancient Greece and Rome, medieval Europe and the Islamic world. Later, the silver mines of Spanish America fed a global trade: Spanish silver dollars circulated across the Americas, Europe and Asia, and huge quantities flowed to China. In parts of Asia silver was also traded by weight as ingots rather than coins, a story told in our page on the history of silver ingots.
The end of silver in US circulating coins
In the United States, dimes, quarters and half dollars were long made of 90% silver. As the value of the silver in them approached their face value, the coins were at risk of being hoarded and melted. The Coinage Act of 1965 removed silver from dimes and quarters, which switched to a copper-nickel clad composition. The half dollar kept a reduced silver content for a few more years before it too became base metal.
Other countries went through similar changes during the twentieth century. Today, silver coins are minted mainly as bullion and collector pieces, not for circulation.
Why investors hold silver
People who buy physical silver usually give some combination of these reasons:
- A tangible asset. Silver is a physical good with no issuer that can default on it.
- Diversification. Its price does not move in step with stocks or bonds, although it can move sharply in either direction.
- A lower price per ounce. Silver allows small, regular purchases and easy division of a holding.
- Industrial exposure. Demand from electronics and solar gives silver a link to the wider economy that gold lacks.
The flip side is volatility. Because silver is both a monetary and an industrial metal, it tends to swing more than gold, and its bulk makes storage more demanding. Proportionally higher dealer premiums also mean it suits holders with a longer horizon. None of this is a recommendation; it is simply how the metal behaves.
To compare the two metals in more detail, see our page on gold vs silver. For the physical formats, start with silver bars, and for the bigger picture, our guide to precious metals investing.
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