What Can We Learn From Silver Price History?

Silver has been deemed a worthy investment for thousands of years. In recent years, supply and demand forces have caused the price of silver to both skyrocket and sink dramatically. Here are some of the historical patterns of silver and how these patterns can be used for current investments.

silver price

Major Global Events

In the last few decades there have been 4 major events that have affected the entire world market of silver:

1: Skyrocketing inflation
2: Less silver mining sources
3: Failure to corner the market by the Hunt Brothers during the 1980’s
4: US government decision to remove all silver from coins, effectively selling them to the private sector


Silver prices have been volatile for hundreds of years. Experienced investors are accustomed to this volatility and will tell you to ignore these major price changes. Regardless of whether the price goes up or down, silver will never lose all of its value. It will also never be nationalized or go bankrupt.

Technology Age

Silver is used in numerous modern products, from laptops to cell phones. The technology boom has had a major impact on silver prices, causing them to dramatically increase. From 2000-2008, the silver market prices rose an astonishing 18.5%, with almost half of the silver demand coming from industries.

The problem with industrial silver is that it usually doesn’t return to the market for repurchase. When you buy a computer with some silver on it, you are likely to throw away the entire computer along with any precious metals it contains. With more and more IT devices being built, we will likely see the silver spot price skyrocket even higher.

Increased Investor Activity

Naturally, increasing prices have drawn more investors into the market. In 2003, investor demand was about 6 million ounces. In 2009, investor demand went all the way up to 136.9 million ounces. This increase is largely attributed to new exchange traded funds (ETFs). When an ETF goes up in value, the fund managers have to buy physical silver, greatly increasing the demand and price.

Mining Costs

From 2006-2008, several governments lowered their silver sales. It became much harder to obtain silver, simply since new mines had to be started and they were often costly and problematic. The cost of opening a new mine was also affected by external factors like rising oil prices.

US Dollar and Gold

The rise and fall of the US dollar plays a significant role in deciding the price of silver. When the US economy improves it will likely cause the price of gold to go down. Since silver acts as a counterbalance to gold, it may cause prices to increase even more.

The Prices Cannot Stay Low Forever

Eventually the price of silver will go up and when it does, investors will be flooding the market to purchase bullion. This may be the result of overall investor expectation of constantly rising prices and the attempt to find a suitable entry point to buy silver. If such an event occurs, where silver prices keep rising, investors stand to gain greatly if they have most of their assets in silver.

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