CHAPTER 7

Silver

OVERVIEW

Silver, a white metallic element, conducts heat and electricity better than any other metal. Next to gold, it is the most malleable of all metals. Silver is both an industrial and a precious metal and has been mined since ancient times, when many silver deposits were near the earth's surface. Like gold, silver was used by ancient civilizations as currency, replacing the earlier barter system of commerce.

Silver's extreme malleability makes it too soft for many uses, requiring that a hardening agent—generally copper—be added to the silver. Sterling silver is metal that consists of 92.5 percent silver and 7.5 percent copper. While silver is not very chemically active, it does combine with sulfur and sulfides to form silver sulfide—or tarnish—on its surface.

Silver is most commonly found in combination with other elements and is therefore mined together with zinc, lead, or copper. The biggest U.S. producers of silver are Nevada, Idaho, Alaska, and Arizona. As an industrial metal, silver is used in photography, electronics, and glass and as an antibacterial agent.

Pricing of silver, like that of gold, can be very volatile. In 1979 silver began trading at $6.02 per ounce and ended the year at $28 per ounce. The $28 price is especially remarkable when one considers that the production cost of silver is only $7 per ounce.

The sharp rise in silver prices in 1979 was due in part to a worsening energy crisis and the deterioration of the United States dollar. Other ...

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