A History of Silver Prices
For as long as silver has been in human possession, it has held great value, being used as a form of money and decorations for many thousands of years.
Since a large discovery of silver in Bolivia back in the 1500s there was a fixed price of silver through something called a “silver standard” set by governments. The United States chose a silver standard in 1785. For Canada, the change was made in 1853. But times were changing quickly, and the United States in 1872 enacted the Coinage Act, which chose to embrace a gold standard, instead of silver, resulting in a reduction in silver’s price. By 1974, all of the world’s banks had abandoned both silver and gold standards and instead chose to peg the price of silver and gold in comparison to the value of the pound sterling (GBP) or the U.S. dollar (USD).
Looking back hundreds of years, we can see that the price of silver has risen in value and in the past 100 years has fluctuated quite significantly. There are a few notable developments.
On the Hunt for High Returns on Silver
On Thursday, March 27, 1980, three people named the “Hunt Brothers” fought to influence the price of silver by buying up large quantities of the precious metal, resulting in a huge increase in the price, hitting an all-time high of $50.35 per troy ounce. (The year prior, 1979, saw the price of silver as low as $6.08.) These three brothers held approximately one third of the world’s silver supply that wasn’t possessed by governments.
The subsequent fall of the price to less than $20 USD after this debacle created panic. Because of the Hunts’ corruption, new rules were placed when making purchases on margin, not only on silver, but on other commodities.
The price of silver sank to around $6 from the mid-1980s and confidence wasn’t restored until the mid-2000s. By this time global economic concerns were beginning to take hold in the minds of investors, and various crises were happening in the United States that made economic people very nervous. This launched a time of great economic uncertainty, and the price of a troy ounce of silver rose and continued to rise, peaking at almost $50 USD in 2011.
Silver Prices Correct and Stabilize During Economic Growth
The silver price corrected, and was attributed to the American government’s debt concerns and launching new measures and controls over their nation’s budget. Silver then dropped to $15 USD until 2020 upon the start of the pandemic. Uncertainty returned and the price of silver has generally remained stable since then, at around $24 USD today.
What will the future have in store? We don’t know for certain, but one thing is certain – as long as precious metals continue to hold their luster and practicality, they will continue to be valuable in the hearts, minds and investment portfolios of Canadians well into the future.