- The highest price of silver by the statistics was $49.50. But a long time ago.
- Today’s inflation-adjusted price is already in the three-digit range.
- Silver price is influenced by many factors.
- There are four main ways. New highs of silver are yet to come?
- Or people may forget about this investment, again?
The Highest Price of Silver–By the Common Statistics
The highest price of silver so far was $49.50 in April 2011 on the Comex exchange. At least that is what most data sources show. By other sources, it was $50.35 in January 1980. (The difference may be because several commodity exchanges have different rates, and also spot and futures prices are different.)
But these data are missing important information. There is a big difference between the present and past, the future value of money. The difference can be determined by several methods. One is the use of inflation (changes in consumer prices, CPI.) But what was the highest price of silver in real terms? Or converted to today’s prices?
The Highest Price of Silver–Adjusted for Inflation
If we adjust the monthly maximum prices of silver with monthly inflation, it turns out that at today’s price level, silver peaked at $141.3 in January 1980. That means the $42.29 then-silver is worth $141.3 today, increased with inflation. But let’s calculate with the other peak. If we consider the highest silver price of $50.35 in 1980 to be correct, its value today is a staggering $168.2.
Nice, compared to the exchange rate of around $29,915 in August. Or around $24 at the end of last week. The reason for the difference is simple. The value of the average consumer expenditure basket in US dollars has more than tripled in the past 40 years. (The US inflation index went up to 259.9 points from 77.8 points, an increase of 234 percent.)
What Does This Peak Mean for Silver Investors?
What does this amazing silver peak mean to the average silver investor? Silver can still cause huge positive surprises. Most young people can’t remember these past events, the highest amount ever paid for silver and its current value. Only a few people have read about it. The Robinhood generation is more focused on high-tech innovations.
The Highest Price of Gold Was…
I also recently used this method to calculate the current value of gold price peaks so far. Based on the value of today’s dollar, gold peaked at more than $3,000 in January 1980. Click Gold, Inflation, All-Time Highs–Good to Know Where the Real Top Was.
Silver still lives in the minds of many people as a hedge against inflation. Also in the minds of institutional investors like hedge funds. It was a terrible idea to buy silver near $50 in the past, but it seems to be already relatively cheap today, at $20-30. Time and inflation re-evaluate investments.
ArrayAnd the Next Silver Price Record High? (4 Cases)
While the past exchange rate does not provide any guarantee for the future, we are living in unprecedented times. Unprecedented crisis, unprecedented central bank easing. More and more money printing, negative real interest rates in the long term. All this creates a favorable environment for precious metals that have not been seen for a long time. (Also for other real assets.)
Silver has various use cases. The price of silver is influenced by many factors. I see four major scenarios:
01
Long Crisis, High Silver Price
Silver consumption is in big part for industrial purposes, and, in a crisis, industrial demand declines. The crisis may drag on, for example, if vaccination will be delayed. Also, the economy may be stagnant despite vaccination. But investment demand may intensify and push prices higher. (For negative real interest rates.)
02
Big Rebound, High Silver Price
If there is rapid recovery from the crisis, the price of silver could rise because of industrial use. Demand from the jewelry industry may also increase with people’s incomes. But investment demand may be pushed into the background. Silver may climb higher.
03
The Highest Price of Silver Is Yet to Come
In an ideal environment for silver, economic growth will resume. But interest rates will remain low and inflation high. So, real interest rates can be severely negative. Here, the investment, industrial and jewelry demand may be high at the same time. This version could cause a huge price explosion.
04
Or Fear the Worst for Silver
In the worst-case scenario, it can also happen that silver demand decreases. It will not be bought for nor industrial, nor investment or jewelry purposes in the coming years. Investment manias, hypes, bubbles come and go, and investors may prefer something else. Like tech-stocks, or real estate.
Related Readings for You:
Gold, Inflation, All-Time Highs–Good to Know Where the Real Top Was
- Top 9 Silver Price Forecasts for 2020 and 2021–Is Something Colossal Happening?
11 Top Gold Price Forecasts of Smart Money–How High Can It Go?
- DIY Fake News Generator–Was Gold a Better Investment, or Stocks?
- How to Buy Gold Coins, Bars, Jewels? 4 Ways, Essential Pros and Cons
- Are We Facing Epic Inflation, Horrific Real Interest, and Brutal Gold Price Explosion?
Disclaimer
I’m not a certified financial advisor nor a certified financial analyst, accountant nor lawyer. The contents on my site and in my posts are for informational and entertainment purposes and reflecting my collection of data, ideas, opinions. Please, make your proper research or consult your advisors before making any investment or financial or legal decisions.
I’m long in gold miner stocks and silver, platinum, cryptocurrencies. Short in the S&P 500, and the German DAX at the time of writing.
(Photos: Pixabay.com.)
