Precious metals is in incredibly high demand these days, especially when it comes to industrial use. Silver and gold have been used quite regularly in communication switches, silverware, medical supplies, cameras and much more. You may even be surprised to learn that silver and gold are quite prominently used in new digital technologies as well. Cell phones, computers and TVs, in particular, use them, indicating the incredibly high demand and value of silver and gold.
One might wonder if the future growth in the use of silver and gold in different industries affect their prices. And if there is indeed an increase in the cost of metals, would it affect the pace at which technological innovations are made.
For instance, when gas prices increased during the 2000s, people opted for fuel efficient vehicles instead of choosing gas guzzlers. Eventually, this decreased gasoline’s demand, especially for the long term as consumers eventually switched to other vehicle options. So, could there be a similar demand shift if the soaring prices of precious metals cause companies to look for alternatives?
Industrial Applications for Silver
Silver is undoubtedly the most conductive among all elements, which means that if one switches to an alternative option or even dilutes the metal, they would be compromising on the quality of the product. If manufacturers really want to save costs, the element next in line to silver is copper as it is a viable, albeit, less desirable option when you use it with microwave, motors or other high voltage electronics.
Computers, cell phones and TVs would require a complete redesign from the ground up for allowing a larger energy transmission system and power source to properly compensate for copper components. Of course, this simply not feasible.
Silver is also a vital ingredient in the solar industry because of its incredibly high thermal conductivity of a variety of known substances. Choosing copper instead of silver or various other substances could potentially pose a massive setback to the effectiveness of solar cells. As the solar industry reaches economic viability soon, it will most likely not see any large scale growth, especially if it does away with silver and chooses materials that are not as efficient.
Most, if not every metal possesses antibiotic properties to an extent. Silver is an effective microbe killer and is not as toxic as other metals. Plus, no other currently known substance or element has the ability to serve the role that silver does, which is why it is so vital. Because of all these reasons, the pharmaceutical industries wouldn’t have an alternative option to silver if prices were to soar rapidly. The only option they would have is to increase gold prices with silver’s increasing cost.
Silver’s Prevalent Use in Medicine
As mentioned earlier, silver possesses the most potent antibacterial action and its toxicity levels are quite low when compared to other metals. When you add silver to water, it releases ions. These silver ions can prevent and kill bacterial growth, preventing germs from growing and spreading. The value that these properties offer is known and utilized for centuries.
For instance, the ancient Phoenicians discovered that they could using silver coated bottles could help them keep water and various other liquids fresh for long periods. Almost three thousand years later, American pioneers prevented things like flu, colds and dysentery by inserting silver Dollars inside bottles of milk. You will even find silver biocides used in hospital furniture, catheters, water systems and a variety of tools used in the operation theatre.
Silver nitrate was commonly used during the latter part of 1800s for curing new born kids of different eye infections. Eventually, doctors learned that using silver dressings was a quick and effective way to treat wounds and ensure they healed faster. The use of this metal became quite common in sutures, especially for curing ulcers and treating surgical wounds. These uses are still common today, as many hospitals use silver embedded bandages as they are especially effective for helping burn wounds heal.
In the 1920s, more than three million prescriptions were written per year in the United States for medicines that contained solver. After penicillin was introduced during the 1940s, more and more doctors started using antibiotics for treating bacterial infections, diminishing the use and value of silver in the medical world.
Later on, however, scientific research showed how effective silver could be in the industry, which eventually expanded its use by tenfold. Nanotechnology utilized silver to reduce metal to particles that are measured in one billionths per meter. The nanosilver essentially helps with oxidation by generating oxygen through water or air, destroying the single cell bacteria’s cell wall membranes. What’s best about this entire process is that it doesn’t result in any pollution.
All of this proves that silver has a lot more to offer and it isn’t just a monetary asset. Sure, its use is prevalent in investment and jewelry but its technological and industrial use is quickly increasing. This demand plays a vital role in determine the price direction of silver in the long term.
Gold’s Industrial Application
Gold is arguably the most ductile and malleable metal out there. While it is mainly coveted for natural properties like high density and conductivity, gold can easily be turned into the thinnest, smallest shapes for electrical purposes, especially contact points.
On average, cell phones contain around 0.001 troy ounce gold, which is worth close to $1.30. Of course, this amount is quite miniscule in itself; however, it quickly adds up when you consider that close to five billion people in the world own a cell phone. In addition, more than one billion phones are manufactured every year. Besides their use in cellular devices, gold is a vital component in modern computers and TVs as well.
Whether it is silver or gold, potential price surges will most likely not prompt manufacturing companies to look for alternative substances or metals. As mentioned earlier, there is a high likelihood of price increases in products that utilize these metals.
Even if companies reduce the consumption of these metals, people’s endless pursuit for the most reliable, compact, efficient and high quality products will fuel the demand for silver and gold for years to come.
Gold and Silver as a Long Term Investment
There are multiple reasons that prove why buying gold can be ideal for people who want to invest for the long term. These reasons include physical security, intrinsic value and potential for growth. Most importantly, no metal has been able to match the allure that gold has for its use in status, beauty and jewelry.
Silver and gold have distinct characteristics, which make them ideal for specific applications. With different industries identifying more ways to use gold, analysts believe that the need for both types of metals will significantly increase down the line. With gold mining costs increasing at a breakneck pace, it would be fair to say that gold can be an ideal long term investment.
Here are a few industrial applications that highlight how valuable gold actually is:
Glassmaking: The glassmaking industry heavily depends on gold because it is the only option for manufacturing some of the most in demand products.
Aerospace: The use of gold is vital in different space environments, especially as a lubricant and conductor.
Medicine: The medical industry uses gold as a diagnostic tool and treatment for multiple conditions.
Dentistry: Gold is incredibly popular among dentists because of how chemically inert it is. Because of its high rates, dentists stopped using gold for a while and used other alternatives. However, they quickly realized that this metal is more effective.
Electronics: Gold is commonly used in switches, GPS, smart phones, computers and a variety of other items.
These are just a few of gold’s uses that highlight how vital it is. It would be fair to expect more industries to discover other uses for this metal, which may result in an increase in prices. Because of this, it is rarely a bad idea to invest in gold because it can offer you high returns if you are patient and play your cards right.
The track record for gold and silver has been quite consistent. Sure, there have been a few lows for both metals but their rising demands make them viable investment options. As far as the industrial impact goes, there is a very low chance that companies will substitute these metals for others, which means that most companies that use them will likely increase product prices instead of creating subpar products.
