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The Many Use Cases for Silver Part II: Engines, Hygiene, Mirrors and Windows, Dental Fillings

The Many Use Cases for Silver Part II: Engines, Hygiene, Mirrors and Windows, Dental Fillings

Throughout the centuries, silver has found a use in many different segments and industries. Some of these are still viable today, whereas others have been abandoned a while ago. Below are a few more examples of modern day sue cases for this precious metal. 

Engines of any Kind

Some people may be surprised to learn that engines have silver bits in them. Whether it is a car engine, one for a motorcycle, or any other, they all contain engine bearings. Every single unit is made of steel electroplated with silver. The choice for this precious metal is straightforward: it has a high melting point to cope with heat generated by the engine in question. 

Another use case for silver in engines is as a lubricant. Opting for this choice ensures friction between the ball bearing and its housing is reduced to a bare minimum. Furthermore, research was done to utilize silver in diesel engine filters. It could have potentially replaced platinum to catalyze oxidation of matter. However, diesel engines are slowly being phased out to protect the world’s environment. 

Hygiene and Silver mix Well

No one will look at a hygiene product and wonder how much silver is in there. It is a question people perhaps should ponder more often. Silver has tremendous antibacterial properties – a powerful tool for creating triage bandages –  making it a valuable tool for the production of water filters.

A silver coating can prevent the buildup of bacteria in such filters, for example. The same goes for water purification systems, which often make use of silver ions to kill microbes. 

The same properties have begun making their mark on the food industry. The packaging of food, for example, now contains nanosilver coatings. Even refrigerators may have such a coating to ensure food remains free from external threats. 

Mirrors or Windows may Contain Silver

One interesting aspect of silver is how, when polished, it becomes very reflective. There are numerous applications for this concept, including mirrors.

While the use of silver as a coating on transparent glass has reduced a bit, some older mirrors will still have this layer. More modern creations use aluminum, because it is a much cheaper option. 

Owners of windows which reflect sunlight and keep the interior or a building cool have a silver coating on their glass. It is unclear if the same results can be achieved by using other – and potentially cheaper – metals. 

Dental Cavities and Silver

Most people who walk around with a dental cavity filling will have small traces of silver in their mouth. It applies primarily to older fillings, as modern ones have a completely different composition.

This is also part of the reason why dental cavity fillings used to be extremely expensive decades ago. Using silver for such purposes used to be a costly endeavor. 

Logistical Issues in Argentina and Mexico can Trigger a Much Bigger Silver Shortage

Logistical Issues in Argentina and Mexico can Trigger a Much Bigger Silver Shortage

Similar to gold, the silver industry is impacted by COVID-19. Although this hasn’t triggered any major problems just yet, that situation may change soon. Several companies are struggling to move their silver supply across borders.

Silver Logistics Worsen

It was somewhat to be expected that COVID-19 would continue to wreak havoc throughout 2020. With new infections popping up globally, the same issues which arose several months ago will come into play once again. For companies active in the precious metals industry, this will mean logistical problems more often than not.

Albeit there have been signs of a looming silver shortage, the situation may grow worse. Any company producing silver in Mexico and Argentina will run into export issues. Travel restrictions have been imposed once again, making it very difficult to move metals to other countries.

In Argentina, for example, the number of flights coming out of the southern part of the region is virtually nonexistent.  Mining operations in that part of the country cannot export their ore, bars, or other goods conveniently. Getting workers to and from these locations can be equally problematic.

Overall, the situation in Mexico is relatively similar. Logistics remain a key problem for as long as COVID-19 continues to claim victims. As the global rate of infection is ramping up – primarily in Middle and South America – it seems unlikely that things will improve.in the foreseeable future. 

Lower Production Equals a Higher Price?

On paper, the silver price will rise if the production and supply is lower than normal. COVID-19 may prove to be an interesting catalyst in this regard. Silver has many industrial use cases, as it is found in a lot of products and goods. That demand will not necessarily slow down all that much during this pandemic.

In fact, some industries note stronger demand for silver than normal. An interesting turn of events, and combined with a decrease in production, anything can happen. At the same time, it is possible that production will be able to ramp up again in the near future. It is unclear what effect that would have on the current silver price trend.

Solving logistical issues is never done overnight. Especially not when so many external factors tend to disrupt one’s plans. As the overall available supply of the precious metal keeps shrinking, interesting things are bound to happen. What those things are exactly, remains unknown.

Silver Price Likely to Keep Surging as Production Deficit Looms Overhead

Silver Price Likely to Keep Surging as Production Deficit Looms Overhead

During Q2 and Q3 2020, the silver price has seen a significant price. Many people wonder how long this situation will last. A dwindling supply coming out of Latin America certainly has the potential to keep this momentum going a while longer.

Silver Supplies are Drying up

It is interesting to see how the COVID-19 pandemic continues to disrupt the world’s economy, supply chains, and industries. Even precious metals dealers are facing a lot of pressure, primarily because it has become a lot more difficult to obtain silver as of right now. 

To put this into perspective, there is some supply-related trouble brewing in Mexico and Peru. Both regions are home to mining operations making up 40% of the global silver supply. Due to COVID-19, these mines were forced to either shut down or significantly reduce their output. 

Based on recent findings by the Silver Institute, it is very likely that a market deficit will occur for the first time in years. Mining efforts remain disrupted in the area, and there is no real improvement in sight. A long-lasting disruption can certainly fuel demand for silver even more, thus affecting the price in a bullish manner. 

It is expected there is a 13% decline in silver production from Latin America. This will, in turn, trigger a decrease in the yearly global silver supply by as much as 7.2%. Given the industrial use cases for this metal, as well as the current demand from investors, something will have to give. 

Bullish Silver Price News?

As the second wave of COVID-19 sweeps through the world, production of precious metals is likely to take another hit. Even the biggest operations will not be spared this time around. Not all regions are affected equally, however.

Some sources claim that Peru’s silver output should return to normal before the end of 2020. A lot of that outlook will depend on how the coronavirus situation evolves. Until a vaccine is developed, this uneasy situation may remain in place, up to a certain degree. 

Combined with negative interest rates looking to worsen, and ongoing financial uneasy in traditional markets, Q3 2020 will prove to be very interesting. No one really knows if the silver price surge will continue, but that appears to be a plausible scenario right now. Surpassing $25 will be a challenge, but it isn’t impossible.

Why is Silver so Cheap?

Why is Silver so Cheap?

Comparing the different precious metals on the market today isn’t straightforward. Silver is priced very differently than gold, palladium, copper, and so forth. But why is silver so cheap, especially when compared to gold?

A Lower Innate Value

No one will be too surprised to learn that every precious metal has its own innate value. How high that value turns out to be, depends on which other commodities it will be compared with. Silver is in a bit of an odd position in this regard, as it has always been put on the backburner to gold. Silver is found in this position only because it has been so popular since day one, thus things could be worse. 

Silver Isn’t That Rare

One often heard comment is how gold is the scarcest precious metal of them all. Silver, unfortunately, doesn’t have the same benefit, as it is far less rare. The difference between the two is much larger than most people would have ever expected. As a result, it creates an imbalance between the supply and demand for silver, which helps in keeping the overall price down.

On the other hand, silver has more industrial use cases than all other precious metals today. That helps give it some more value, and also helps offset the imbalance between supply and demand. More silver to go around means that its price will be cheaper, untilt hat situation reverses all of a sudden. Whether that is even possible, remains to be determined. 

Perceived Value by Society

A lot of products, items, and commodities simply derive value from how they are perceived by society. People have grown accustomed to paying [too much] money for Apple products, thus they will keep doing so for future generations, even if the prices increase. For gold, that situation is similar, as it has always been perceived as the “prestigious precious metal” by traders, speculators, and the wealthy elite.

Silver, on the other hand, is perceived as “the poor man’s gold”. Because it has a much lower price point, one could also argue that it is far more approachable for people looking to make a smaller investment.  Unless the perception of the people changes – either through clever marketing or otherwise – silver will always be considered “second best”. That doesn’t mean it’s not worth keeping in one’s portfolio, however. 

The Gold-Silver Ratio

Thanks to the gold-silver ratio, silver has always been downgraded compared to gold. Since the inception of this ratio, silver has been doomed to play second fiddle. At the time, it was deemed that one would need 2 ounces of silver to obtain the value of 1 ounce of gold. It seemed like a fair system, and the ratio is still being used today.

However, the ratio itself has undergone many changes. By the time of the Roman Empire, the ratio favored gold-to silver at a ratio of 12-to-1. Today, the same ratio puts it at roughly 93-to-1, even though it peaked near 130-to-1 earlier this year. Silver will, by the look of things, have a lower value compared to gold, although their internal ratio is bound to undergo some changes in the future. 

Gold Bug Profile: Dr. Martin Murenbeeld

Gold Bug Profile: Dr. Martin Murenbeeld

There are different gold bugs out there, and all of them have a very unique outlook on precious metals in general. Dr. Martin Murenbeeld has made a name for himself in this industry through a lot of hard work. Even today, some of his earlier market outlooks still hold a lot of value.

Who is Dr. Martin Murenbeeld?

For those unfamiliar with the name, Martin is well-respected in the precious metals industry. Not just because he runs a very successful firm in this space, but also because of his overall knowledge of the precious metals and the broader financial industry. 

Following his graduation from the University of California, Berkeley as a Ph.D. in International Finance, Martin enjoyed a brief stint at the Faculty of Management Studies at the University of Toronto. It did not take him too long to try and go his own way, however. 

 This effort culminated into founding the M. Murenbeeld & Associates Inc consultancy, which specializes in gold and foreign exchange markets, as well as economic trends. This consultancy also provides the Gold Monitor, Economic Monitor, and Equity and Bond Observer newsletters. 

For those who want to gain some insights into this personal work, Dr. Martin Murenbeeld is often found at conferences organized by international mining firms or events tied to economics. You may also come across interviews with him in the media, as he continues to provide insights into how the world’s economy is evolving. 

Predicting the Bull Market in 2016

One of the articles by Dr. Martin Murenbeeld that got a lot of attention in 2016 can be found here. In the article, he comments on how gold has entered a bull market in April of that year. Despite expecting some headwinds to push the price down again, the outlook was very bullish, all things considered. 

This outlook was strengthened by a World Gold Council report indicating that a market momentum shift had taken place. During Q1 2016, the gold price noted a sharp increase, as well as an increase in demand for ETF bullion. 

It was also a time when negative interest rates started to become more apparent. Today, those are nearly unavoidable in any developed country, with no real expectation of improvement. 

Advising to Hold in 2018

As it turned out years later, Murenbeeld had made another accurate market assessment. He provided another crucial update on the market in October of 2018, during the Mines and Money Americas conference. After all, the gold price noted some wild swings in the first half of that year, making people wonder if now if the time to sell had come. 

Murenbeeld remained confident that late 2018 wasn’t the right time to sell gold. In fact, he advised people to keep acquiring gold if they hadn’t diversified their portfolio prior. Especially those with a diversified portfolio won’t lose out on much if gold notes a bit of a struggle. The other assets in their portfolio tend to appreciate in the same period. 

Overall, Murenbeeld remained optimistic about the future of gold. Given how the gold price has evolved in 2020, the advice to keep holding onto one’s diversified portfolio has certainly paid off. With new highs still within reach, continuing to hold may be the only viable course of action.