Historical Prices of Silver

By Lora Keleher , last updated September 21, 2011

By knowing the historical prices of silver, individuals can more accurately predict the prices of silver in the future. An understanding of historical prices also gives investors a means to examine key trends and patterns, and make correlations between fluctuations in other markets, historical events, and the price of silver. Although there is no means of accurately predicting the future 100 percent of the time, investors who posses historical knowledge have a better chance of making savvy silver investments that will net them future profits.


Throughout the 1950’s the prices of silver swiftly rose. The biggest reason for this surge was a high level of demand, without a simultaneous increase in mining and production. After World War II, many countries needed the metal as part of the rebuilding process. Additionally, a growing worldwide demand for electricity and consumer products that incorporated silver contributed to the rising price. To counteract the demand, however, the US Treasury sold large amounts of silver. Otherwise, the price would have risen even further.


In the early 1960’s, the government decided to phase out the use of silver bullion as currency, and began selling large quantities of the metal coins for use in the production of consumer and industrial goods. However, throughout most of the decade the price of silver continued to rise, continuing the trend from the '50s. In 1966, the use of silver in production reached its peak level, as manufacturers began using other raw materials to replace silver. After peaking in 1968, the price of silver started to decline, because of the decrease in demand, and continued increase in supply provided by federal government sales.


By 1971, the government had completely eliminated the issuing of silver currency and largely stopped selling silver. As a result, investor confidence grew, supplies diminished, and the price of silver rose until the recession caused a decline in product demand. This caused silver prices to dip in the mid '70s. In the late '70s, prices again began to climb, largely because of investor confidence that rising inflation and current political events would cause demand to rise.


With the continued recession causing a decrease in the demand for silver, coupled with manufacturers cutting the amount of the metal used in production, the price of silver went through an overall decline in the '80s, mainly because there was a greater supply than demand. Although there was a surge in price in 1982, largely caused by problems with the financial markets, as well as an easing of credit standards, leading investors to fear inflation. The surge was short-lived, lasting less than a year.


Over the course of the '90s, silver prices fluctuated, with some significant decreases and increases. The erratic pattern was primarily the result of investor uncertainty about the relationship between the supply and demand of the metal. Overall, however, the price of silver rose during the decade.


During the past decade, the price of silver has again risen at a fairly substantial rate. The economic uncertainty caused by the global recession was a significant factor in prompting investor demand for this precious metal.

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