Silver as an investment


may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4,000 years, although it lost its role as legal tender in developed countries when the use of the silver standard came to an end in 1935. Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. In 2009, the main demand for silver was for: industrial applications, jewellery, bullion coins and exchange-traded products. In 2011, the global silver reserves amounted to 530,000 tonnes.
When compared to the other two main precious metals, platinum and gold, silver is the least scarce among them. Platinum is about 139 times rarer than silver in terms of mined and available platinum to silver, and gold is about 8 times rarer than silver.
Millions of mint issued silver bullion coins, such as the Canadian Silver Maple Leaf, the American Silver Eagle, or the British Silver Britannia, are purchased as investments each year. While these bullion coins are legal tender, their inherent value is tied to the price of silver and so are rarely traded at face value. However, "junk silver" coins, which were originally minted as currency, can sometimes be found in circulation and are common targets in the practice of coin roll hunting.

Price

The price of silver is driven by speculation and supply and demand, like most commodities. The price of silver is notoriously volatile compared to that of gold because of the smaller market, lower market liquidity and demand fluctuations between industrial and store of value uses. At times, this can cause wide-ranging valuations in the market, creating volatility.
Silver often tracks the gold price due to their shared histories as monetary metals, although the ratios vary. The gold/silver price ratio is often analyzed by traders, investors, and buyers and in fact might be the oldest continuously tracked exchange rate in history.
The crustal ratio of silver to gold is 17.5:1. This is a physical reality. Over the centuries, the relative values of silver to gold, which are a social and institutional construct rather than a physical reality, have diverged significantly. In 5th century Athens, gold was valued 14x more highly than silver for a ratio of 14:1. In Roman times, the price ratio was set at 12 to 1. In 1792, the gold/silver price ratio was fixed by law in the United States at 15:1, which meant that one troy ounce of gold was worth 15 troy ounces of silver; a ratio of 15.5:1 was enacted in France in 1803. The average gold/silver price ratio during the 20th century, however, was 47:1.
The price of silver has risen fairly steeply since September 2005, being initially around $7 per troy ounce, but reaching $14 per troy ounce for the first time by late April 2006, and the average price of the month was $12.61 per troy ounce. As of March 2008, it hovered around $20 per troy ounce. However, the price of silver plummeted 58% in October 2008, along with other metals and commodities, due to the effects of the credit crunch. By April 2011, silver had rebounded to reach a 31-year high at $49.21 per ounce on April 29, 2011 due to concerns about monetary inflation and the solvency of governments in the developed world, particularly in the Eurozone.

Influences

The price of silver is influenced by a variety of factors.
  • The silver market is much smaller and less liquid than the gold market, with the London gold bullion market turning over 18 times more monetary value than its silver market. Small, illiquid markets have inherently higher volatility.
  • Due to the properties of silver, it has a major role in the manufacturing of photovoltaics, RoHS compliant solder, clothing and medical uses. Other new applications for silver include RFID tags, wood preservatives, water purification and food hygiene. Data from 2010 reveals that a majority of silver is being used for industry, jewelry, and investments.
  • Silver, like all precious metals, may be used as a hedge against inflation, deflation or devaluation.
  • Public sentiment regarding silver as a hedge against inflation may be influenced by marketing campaigns from silver producers and affiliates.
  • Unlike gold, a significant portion of silver production is a byproduct of mining other metals like copper, lead, and zinc. This means silver supply is often less responsive to price changes. Disruptions in base metal mining can unexpectedly reduce silver output, tightening supply and increasing prices.

    History

The highest recorded silver prices were:
1980201120252026
London LBMA $49.45 $48.7 $69.74 $99.00
London LBMA $50.5 --
New York COMEX $48.7 $48.55 $78.67 $101.33
New York COMEX $50.36 $49.82 $82.40 $103.26
Chicago CBOT --
Chicago CBOT $52.8 --

1979–1980

In part due to the actions of the Hunt brothers, the price for silver Good Delivery bars jumped from about $6 per troy ounce to a record high of $49.45 per troy ounce in the United States on January 18, 1980, representing an increase of 724%. The highest price of physical silver is hard to determine, but based on the price of common silver coins, it peaked at about $40/oz.
On January 7, 1980, in response to the Hunts' accumulation, the US Commodity Exchange suddenly adopted "Silver Rule 7", placing heavy restrictions on the purchase of the commodity on margin, causing massive liquidations and enormous downward pressure on the price. The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days, due to the sudden forced liquidation of margin positions, they became unable to meet their obligations, causing further panic in the precious metal markets.
The Hunts were never found guilty of any criminal wrongdoing, although they lost a civil suit in connection to the event. The event also caused the Hunts' fortune to dwindle, culminating in them filing for bankruptcy. In 1989, they agreed to a civil settlement with the US Commodity Futures Trading Commission, paying out fines, and agreeing to a ban from trading commodities.

2010–2011

There was such immense risk to the world economy that investors drove the prices up by buying defensive commodities. When the short-term risks were believed to have subsided, many investors reallocated their assets back into yielding investments such as stocks or bonds.
The 2011 United States debt ceiling crisis was a major factor in the rise of silver prices. The 2010 U.S. midterm elections highlighted policy differences between President Obama vs. the Tea Party movement. The price of silver concurrently rose from $17 to $30 as the elections approached. In late 2010 and 2011, silver found a "new normal" between $25 and $30.
In 2011, Republicans in US Congress demanded deficit reduction be part of legislation raising the nation's debt-ceiling. The resulting contention was resolved on 2 August 2011 by the Budget Control Act of 2011.
During the first few months of 2011, Moody's and S&P both downgraded the outlook on US finances; this was a major shock to the financial world and resulted in silver's climb to $50.
  • On April 18, 2011, U.S.-based rating agency S&P issued a "negative" outlook on the U.S.'s "AAA" sovereign-debt rating for the first time since the rating agency began in 1860, indicating there was a one-in-three chance of an outright reduction in the rating over the next two years.
  • On April 25, 2011, silver traded $49.8 per ounce in the New York spot market.
On August 5, 2011, S&P issued the first ever downgrade in the federal government's credit rating, citing their April warnings, the difficulty of bridging the parties and that the resulting agreement fell well short of the hoped-for comprehensive 'grand bargain'. The credit downgrade and debt ceiling debacle contributed to the Dow Jones Industrial Average falling nearly 2,000 points in late July and August. Following the downgrade itself, the DJIA had one of its worst days in history and fell 635 points, on August 8.
Then, as it became likely that U.S. Secretary of Treasury Timothy Geithner would order the treasury to use extraordinary measures to delay the crisis, silver settled back at $35. As the debacle continued during the summer, silver moved in the range of $33 to $43.
As it became clear that the "financial apocalypse" would be delayed by late summer, many investors dumped silver and commodities and moved back into U.S. equities. The price of silver quickly went back to $30 and declined below 2010 levels in the next few years.
Whether classifying silver's movement as a 'bubble' has been debatable, with Peter Schiff denying that a bubble ever existed and asserting that the factors that led to the increase in the silver price have not yet been resolved.

2025–2026

Silver prices rose sharply during 2025, supported by a mix of industrial and investment demand and recurring concerns about limited supply. The year began with the LBMA Silver Price near $29.41 per troy ounce and then advanced through the first half of the year, moving above $35 per ounce in early June and reaching its highest level since February 2012 in spot trading.
In December 2025, spot prices accelerated further and set new nominal records. Reuters reported that silver reached a record $66.87 per ounce on December 17 and then rose again to an intraday high of $77.40 per ounce on December 26. Reasons cited for silver demand exceeding supply include record industrial usage in the prior year, including demand tied to photovoltaic applications, electrification, and the artificial intelligence boom, as well as an ongoing structural market deficit.