Silver Prices

Because silver is a precious metal, its price is determined by the supply and demand ratio at any given moment. As is the case with other precious metals, there is a limited amount of silver in the world. It is not a product that can be manufactured en masse, and, therefore, is subject to issues such as weather and politics that may affect silver mining operations.

Silver is traded 24 hours a day in world markets. The oldest silver market is in London where it was opened in the 17th century. There you can trade physical silver on a spot basis, buying or selling it for the exact current going rate. London is the center of the physical trade of silver, but the COMEX division of the New York Stock Exchange trades most of the paper contracts on silver. Spot prices for silver are determined by the going rate at the COMEX.

Price Trends Since 1950

Unlike the price of solid gold, silver prices were fairly stable throughout the decades between 1950 and 1970, however, there was a strong upturn in the late '70s that lasted into the '80s. Silver prices went from around $2 to over $20 and then started to move back down. By 1990, silver had dropped again to around $5.

In 1961, the US Treasury was running out of silver and decided to phase silver out of currency in order to free silver reserves. By 1971, the Treasury had completely removed silver from its currency and had backed out of the silver market. During the next two years, the demand for silver far outweighed the supply of new silver, silver inventories were depleted, and the price of silver rose.