What was the highest silver price ever and when was it reached? Learn about the white metal’s historic and current price movement.
Like its sister metal gold, silver has been attracting renewed attention as a safe-haven asset.
Although it continues to exhibit its hallmark volatility, many silver investors believe that a bull market is on the way for the precious metal. Experts are optimistic about the future, and as a result, some market watchers are putting forth price forecasts and asking themselves, “What was the highest price for silver?”
The answer reveals how much potential there is for the silver price to rise. Read on for a look at silver's historical moves, and what they could mean for both the price of silver today and the white metal’s price in the future.
How is silver traded?
Before discovering what the highest silver price was, it’s worth looking at how the precious metal is traded. Knowing the mechanics behind how it changes hands can be useful in understanding why and how its price changes on a day-to-day basis and beyond.
Put simply, silver bullion is traded in dollars and cents per ounce, with market activity taking place worldwide at all hours, resulting in a live silver price. Key commodities markets like New York, London and Hong Kong are just a few locations where investors trade the metal. London is seen as the center of physical silver trade, while the COMEX division of the New York Mercantile Exchange, called the NYMEX, is where most paper trading is done.
There are two popular ways to go about investing in silver. The first is through purchasing silver bullion products such as bullion bars, bullion coins and silver rounds. Physical silver is sold on the spot market, meaning that in order to invest in silver this way, buyers pay a specific price for the metal — the silver price per ounce — and then have it delivered immediately.
The second is accomplished through paper trading, which is done via the silver futures market, with participants entering into futures contracts for the delivery of silver at an agreed-upon price and time. In such contracts, two positions can be taken: a long position to accept delivery of the metal or a short position to provide delivery.
Paper trading might sound like a strange route to take when one wants to invest in silver, but it can provide investors with flexibility that they wouldn’t get from buying and selling bullion.
The most obvious advantage is perhaps the fact that trading in the paper markets means silver investors can benefit long term from holding silver without needing to store it. Furthermore, futures trading can offer more financial leverage in that it requires less capital than trading in the physical market.
It’s worth noting that supply chain disruptions caused by COVID-19 have caused ongoing problems for those interested in buying physical silver — travel restrictions and other factors have left dealers with limited product to sell, and have pushed up premiums on physical silver. That means even those who can find silver bullion products for sale may see much higher markups than usual.
Market participants should be aware that they can also invest in silver through an exchange-traded fund (ETF). Investing in a silver ETF is similar to trading a stock on an exchange, and there are several silver ETF options to choose from. For instance, some ETFs focus solely on physical silver bullion, while others focus on silver futures contracts. Still others focus on the silver mining market itself or follow the live silver price.
Investors may also find the iShares Silver Trust (ARCA:SLV) appealing. It uses the London Bullion Market Association silver price as its benchmark and holds silver bullion.
How was silver priced historically?
Silver hit US$48.70 per ounce, the highest silver price to date, towards the end of the 1970s.
However, the purchase price didn’t exactly reach that level by honest means. As Investopedia explains, the metal’s bid price was driven by the Hunt brothers, two wealthy traders who attempted to corner the market by buying not only physical silver, but also silver futures — they took delivery of those silver futures contracts instead of taking legal tender in the form cash settlements. Their exploits ultimately ended in disaster: On March 27, 1980, they missed a margin call and the silver market price plunged to US$11.
Silver wouldn’t test that high again until 2011. At that time, its price uptick came on the back of very strong silver investment demand, and was more than double the 2009 average silver price of US$14.67. The chart below from Kitco spans from the start of January 2010 to February 2022. It shows that the silver price reached US$47.94 in April 2011 before plummeting in the years that followed.
Silver price chart, January 2010 to September 2022.
Chart via Kitco.
The chart also shows the current upward trend in the silver price, which has been spurred on by the economic uncertainty surrounding the COVID-19 pandemic. The price of silver breached the key US$26 level in early August 2020, and soon after tested US$30 — but it has failed to make substantial progress.
Although the silver price was trading around the US$22 point as of early 2022, market watchers are still curious as to when the silver price will continue its upward trajectory. Only time will tell, but Gwen Preston of Resource Maven and Peter Krauth of Silver Stock Investor and Gold Resource Investor are confident that silver bugs are in for a treat. In a late 2021 interview with the Investing News Network (INN), Krauth said he think there are good odds that silver will challenge 2020's high again in 2022.
Chris Marcus, founder of Arcadia Economics, also expressed bullish sentiments in an interview with INN. Marcus said he's feeling positive about 2022, and would be "stunned" if the precious metal was still around US$25 at the end of the year. He doesn't think it will take much longer for silver to break past the all-important US$30 level.
Like other metals, the silver spot price is most heavily influenced by supply and demand dynamics. However, as the stats above illustrate, the silver price can be very volatile. That is partially due to the fact that the metal is subject to both investment and industrial metal demand within the global markets.
In other words, it’s bought by investors who want it as a store of wealth, as well as by manufacturers looking to use it for different applications that are incredibly varied. For example, silver has diverse technological applications and is used in devices like batteries and catalysts, but it’s also used in medicine and in the automotive industry.
In terms of supply in 2021, the world’s three top producers of the metal were Mexico, China and Peru. Interestingly, even in those countries the white metal is usually a by-product — for instance, a mine producing primarily gold might also have silver output.
Is the silver price manipulated?
As a final note on silver, it’s important for investors to be aware that manipulation of prices is a major issue in the space.
For instance, in 2015, 10 banks were hit in a US probe on precious metals manipulation. Evidence provided by Deutsche Bank (NYSE:DB) showed “smoking gun” proof that UBS Group (NYSE:UBS), HSBC Holdings (NYSE:HSBC), the Bank of Nova Scotia (NYSE:BNS) and other firms were involved in rigging silver rates from 2007 to 2013.
JPMorgan Chase (NYSE:JPM) has been long at the center of silver manipulation claims as well. For years the firm has been in and out of court for the accusations. In a recent case, JPMorgan agreed to pay US$920 million to resolve federal agency probes regarding the manipulation of multiple markets, including precious metals.
In 2014, the London Silver Market Fixing stopped administering the London silver fix, which had been used for over a century to fix the price of silver. It was replaced by the LBMA Silver Price, which is run by ICE Benchmark Administration, in a bid to increase market transparency.
Market watchers like Ed Steer have said that the days of silver manipulation are numbered, and that the market will see a significant shift when the time finally comes.
While there’s a concrete answer to the question “What was the highest price for silver?” it’s anyone’s guess whether it will reach those heights once again. Even so, many commentators say prospects are bright for buying silver — and no matter the current state of the market, investors will no doubt be watching to see how the metal fares.
This is an updated version of an article first published by the Investing News Network in 2015.
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Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.
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