The Silver Institute- Price History

By 1966 the Treasury’s program of eliminating silver from coinage was in place. The Treasury continued to use some silver in coins from then until 1969, but the annual average during these four years was 38.5 million ounces, down from 178 million ounces per year on average during the previous four years. Austria, France, and West Germany continued to use silver in some circulating coins until the late 1970s.

The U.S. government also continued to sell silver bullion. From 1966 through November 1970, 674 million ounces of bullion were sold. (In 1967 the bullion sales program was transferred from the Treasury to the General Services Administration. Ownership of the bulk of the remaining silver were transferred from the Treasury stocks to the National Defense Stockpile.)

Industrial demand meanwhile remained strong, although there was a period of weakness in the mid-1960s. The higher silver prices had some limiting effect on use, although the major factor was slowing overall economic growth and a shift in the economy away from the manufacture of goods that used silver. Industrial use peaked in 1966 at 414.9 million ounces. It declined 10 percent over the next two years, before stabilizing between 372 and 387 million ounces on an annual basis in the late 1960s and early 1970s.

Investors remained keenly interested in silver, absorbing around 620.5 million ounces of silver from 1964 through 1970. Interestingly, the price of silver rose from $1.29 to a peak of $2.57 in 1968, before falling back. The rise and fall in silver prices was coincidental with the volume of these investor purchases: As investor demand decreased over the next three years, prices softened commensurately.

The weighted average price paid in these investor acquisitions, using annual average prices, was $1.88 per ounce. This figure will be important in understanding the next phase of the silver market, from 1971 into 1979, when the new supply of silver fell short of industrial requirements and the resulting deficit was accommodated by investor selling.

While investor demand was strong and industrial demand remained at healthy levels, Mine production rose at a 3.4 percent per annum rate, from 218.4 million ounces in 1965 to 258.5 million ounces in 1970. (Actually, mine output of silver was not as vibrant as these figures suggest, since 1965 was a year of stable output and 1970 represented a cyclical peak in silver production. Output fell back the following year, and did not regain its 1970 level until 1977.) Secondary supply also continued to expand, in part due to the rise in silver prices, which made recycling much more attractive. Bloated by continued U.S. government sales, total supply remained high throughout this period.

1950 to 1960 | 1960 to 1965 | 1966 to 1970 | 1971 to 1978 | 1979 to 1980 | 1981 to 1990 | 1990 to 1999 |
2000 to Present

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