The Historic Value of Silver: 100 Years of Silver

Silver is a volatile market, because whilst gold has remained the same for many years, barely budging over the course of 200 years, silver has gone through many changes.

At the time of writing, silver is about $16 an ounce, and it has been going through a number of small rises and falls for sometime. This is not too dissimilar to the price of silver one hundred years ago, but the future was bleak for it back then. In 1920 it had fallen to its lowest ever, close to $5 an ounce if we adjust for inflation, and around $0.30 if we do not. It’s almost impossible to imagine how such a valuable metal could be worth so little, even with inflation, but once it hit rock bottom then it was able to find an upward path. There were some steady increases over the next twenty years. It rose a lot and it fell a lot, but overall the price of silver remained towards the upper end, and by 1970 it was at around $20 an ounce (adjusting for inflation), not much more than it is now.

There was a huge rise in 1980, which we will discuss shortly, and this was to be the peak for silver in the last 100 years. It had dropped to $6 in 1990, and from then it was able to steadily make its way back up again. When they say that silver is volatile, they are not joking. Compared to gold, whose 100-year graph looks like a relative flat-line, silver has the erratic peaks and falls of an ECG after a shot of adrenaline.

Promise for the Future?

There are many investors that speculate that the price of silver will go through the roof in the years to come, maybe even in the next 12 to 18 months. Many of them use the peak of 1979/1980 as evidence that this will happen.

During these years, and in the course of 6 months, silver went from $6 an ounce to nearly $50 an ounce. This is a huge jump, one that was unprecedented at the time and one we have not seen the likes of since. This means that if you spent as little as $100 on silver back then, it would have climbed to around $800 just a few months down the line. Silver is now around $16, so if silver returns to this price it probably wouldn’t be that impressive, but that’s only if you ignore inflation. The fact is when we compare the value of a dollar now to the value of a dollar in 1980, we discover that this $50 maximum would actually be closer to $150 in today’s prices.

There are many reasons to suggest that history might repeat and that the value of silver might climb higher than $50 and even to the heights of $100 or $150 an ounce, but this is all speculation. The truth is that no one really knows. No one could have anticipated that the price of silver would climb so high in such a short time in 1980, and no one can safely and with a 100% guarantee say that the same will happen again.

However, it is true that history repeats itself and that it is possible to understand the future by learning the past, so be sure to study silver’s history if you want to predict its future.

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