Silver has been prized since ancient times. The brilliant metal has been shaped into jewellery and used to make everything from tableware and chess pieces to clocks and hairbrushes. An excellent conductor of electricity, it is also used in industry and medicine. Like gold and platinum, silver is a precious metal. Long employed as a standard for currency, silver’s value changes from moment to moment on world markets.
Silver and the Troy Ounce
Silver is sold by the troy ounce. Troy weight is an old system of weights and measures that was developed in the Middle Ages in Troyes, France. A troy pound consists of 12 troy ounces. A troy ounce is further divided into 20 pennyweights. In fact, the old, pre-decimal currencies of much of Europe were based on something roughly like the system of troy weight. Troy ounces are actually slightly larger than ordinary, or avoirdupois, ounces. Today, a troy ounce of silver is considered to be equal to 31.103 grams.
Traders bid on the price of silver per ounce. Investors may purchase silver from the large exchanges in bars of either 5,000, 1,000, or 100 ounces. While silver may be kept at home or in a bank safety deposit box, many choose to have their purchases stored in a special depository. The large exchanges also offer purchase of silver on margins of as little as 20%. Investors play the market by holding their silver until prices have risen enough to make a sufficient profit. Around 2009, economic conditions have caused silver prices to jump from around £2 an ounce to the current price of over £11 an ounce.
Factors Influencing Worth
The price of silver is determined by traders in global commodities markets, such as MONEX and COMEX. Traders bid on contracts for the precious metal. Bids vary based on current supplies versus expected demand. Silver supplies can be affected not only by actual use, but also by fluctuations in the value of other commodities, like gold and dollars. The price of world currencies, in particular, influences the worth of silver. The dollar is the world’s reserve currency. This means that it is used as a standard by most nations. Debts are paid by exchanging real or virtual dollars. Other currencies are evaluated in terms of how many dollars they will buy.
Precious metals like silver go up in price when traders and businesspeople lose confidence in the dollar. Many invest in silver as a hedge against inflation. Ordinary people buy silver coins and ingots, or bars, to use in times of scarcity. Collectors also exchange valuable old silver coins. Many of these pieces possess considerable historical and cultural interest, and are worth far more than their actual worth in silver. But they too fluctuate according to the constant changes in the worth of the metal.