Silver Price History

Silver Price History 1792-1999 Chart:
Silver 1792 to 1999 Price History Chart from www.kitco.com
Source: www.kitco.com


Silver Price History 1985-2011 Chart:
Silver 1985 to 2011 Annual Price History Chart from www.kitco.com
Source: www.kitco.com

People have had a fascination with silver for thousands of years. Remnants of the multiple uses of silver have been discovered in the form of jewelry, food vessels, and even religious artifacts that were formed centuries ago with this durable metal. Some, in fact, are thought to date back to as early as 700 BC. In fact, silver was a very popular commodity in Europe dating back several thousand years. This is because it has been considered to have value with regard to its functionality from making everything from jewelry to utensils.

Today, silver is considered to be a very valuable commodity. It serves investors well as a hedge against inflation - and has become an especially sought after investment over the last several years during the economic downturn as most real estate and equity types of investments had their values plummet.

Silver also has a great many industrial uses today as well. Due to silver's strength and ductility, along with its ability to conduct electricity and to withstand extreme temperature ranges, silver can be used in a wide variety of industries. This metal has also found many uses in the health care field where it is used for its antibacterial and infection prevention characteristics.

A History of Purchasing Power

In ancient Roman times, silver was used for money. In fact, throughout the Middle Ages, there was actually more silver above ground than there was gold. The pricing of silver has followed several different calculations over time. For example, in the 14th century, approximately 30 silver pennies were equal to one ounce.

In the United States, as far back as 1792, silver took on an important role in the U.S. monetary system. This was the year that the United States Congress through the Coinage Act based the country's currency on the silver dollar and its fixed relationship to gold. This Act also fixed currency and coinage defining a dollar as 27 grams of silver, or approximately 86.8 percent of a troy ounce. Silver, in fact, was used through the year 1965 for the United States coinage needs. And many countries today, including the U.S., now issue silver bullion coins.

In the late 1800s, the coinage of silver dollars was officially dropped by Congress. Around that same time, the National Silver Party was established in the U.S. Prior to the twentieth century, a major impact affecting the price of silver was supply and demand. On the demand side, it remained somewhat constant. However, the supply of silver was subject to fluctuation, based on mining and discovery. In fact, this supply and demand is what eventually led to the revaluation of the United States dollar in 1843 because the increased supply of silver subsequently led traders to trade in their silver for gold, which in turn threatened the supply of gold.

In the mid-1930s, President Roosevelt ratified the London Silver Agreement, declaring it to be one of the purposes of his action to augment the purchasing power of peoples in countries. By 1971, the United States was no longer on the gold standard. Since then, the United States' dollar value has been based on trust and economic power.

The Gold and Silver Exchange Ratio

When determining prices of precious metals, there are certain methods that are used by investors. Looking at silver price history, for example, oftentimes investors look at the gold and silver exchange ratio in order to decipher what silver is worth at a particular time.

In this case, a ratio is used that demonstrates how many ounces of silver it will take in order to purchase one ounce of gold. This ratio is variable and it fluctuates a great deal. It has been calculated for many centuries, starting in the year 323 B.C. where the ratio stood at 12.5, meaning that it would take 12.5 ounces of silver in order to purchase one ounce of gold.

The value of gold is extremely dependent upon its relative scarcity. Therefore, the gold and silver exchange ratio moves based on supply and demand for these precious metals. Both gold and silver have been considered safe havens during times of turmoil. The silver price history indicates that silver is a safe place to store wealth in times of uncertainty.