I’ve posted the market value of silver below. It’s represented in an automatically updating widget powered by the same hamster wheels that keep Big Ben going. So, it should be up to date! Let me know if, for some reason, it isn’t. The 925 sterling silver price per ounce seems to always be on the move!
Please note also that although this article discusses the price of silver, it should not be used as investment advice. We are mostly interested in this subject out of curiosity about economics and about participating in the silver jewelry industry, not equities or commodities trading, although I could digress.
There’s the current silver price per ounce! Overall, precious metals have had a very strong performance this year in the market and could easily return to much higher prices in the next several years. Many factors influence this price as well. Some have complex direct and indirect causal correlations.
Stocks and Silver: How are They Related?
Typically when there’s a crisis in the equity markets, as people liquidate their positions to prevent further losses, they immediately look to something else in which to invest their money, even if just for a couple of hours while they wait for prices to bottom out, so they can re-invest and perhaps end up making money over the long-term by getting way better prices than they had originally held before the market crashed.
Silver and gold both play this traditional haven role for temporary investment.
The Yen is used similarly during market crisis’ in Japan. When Japanese investors get comfortable with equity prices again, sometimes in the very short-term, literally hours, they typically take their cash out of the Yen and put it back into the equities market, and you will find (especially if you watch the ‘tape’), contrary to what some believe is a totally unpredictable and erratic market, that buying and selling behavior are key factors in price action.
Silver Prices and Inflation
By the ‘gold standard,’ currencies were once theoretically considered valuable because they were backed by gold stores. But as money has continued to be printed in large quantities, and the amount of gold in Fort Knox etc. has essentially stagnated, we should theoretically have high inflation. Commodities are furthermore known to gain in value when currencies lose value – this happens just by virtue of the fact that inflation causes an inherent decline in the value of currency, which would make silver the better investment, even if silver remained at the same inherent value.
There may be an argument to reinstate the gold standard, but it’s unlikely that it would ever be able to catch up.
For most, this simply means that it could make more sense to buy gold than to keep money in cash, as a physical investment. The value of cash, over the long-term, almost always goes down, and inflation rates are often considerably higher than what governments report. This is, unfortunately, the case because institutions like the Federal Reserve are supposed to try to minimize inflation. Their resulting reports end up reporting inflation numbers that exclude crucial items like food and oil, in order to get to a less unacceptable number.
This is one of the reasons we like selling silver, and not just any silver, but that which comes in the form of attractive bracelets, earrings & necklaces. Not only does silver have lasting inherent value. There’s value in its beauty as well.
Silver Prices and Manufacturing
So, it seems we left out some factors that might affect the price of silver. It turns out that the cost of silver itself impacts the cost of silver as does the demand of silver. When silver gets cheap enough that it is no longer profitable enough to mine, the incentive for mining reduces and less silver floods the market (either that or they’re still producing and just hiding the silver somewhere).
The reduction in the sale of silver in the market plays into traditional supply and demand dynamics. Scarcity rises prices, and then when the prices get high enough to make it profitable to mine, distribution increases and prices are lowered again. In another article, we discuss in more detail what leads to the demand for silver and why silver is valuable.
Silver Prices and Technology
Another factor that impacts the price of silver is technology and how silver is used in it. New technologies that require silver like solar panels, for instance, increase silver demand and therefore prices, whereas technologies that typically have required silver ut are able to replace it with other metals reduce demand. Due to the higher expense of silver compared to other comparable metals, technology innovators have aggressively sought out alternative alloys etc. for this purpose. As solar panels are increasingly employed around the world in an effort to prioritize clean energy, the price of silver will likely increase as well, unless an alternative metal is found, which seems unlikely in the near-term.
Silvery Jewelry Prices: day-to-day
It has not been all that common, as far as I have seen, for stores to link their prices to refresh as the price of silver fluctuates. This is especially true of the high-end market for silver jewelry that could cost in the thousands of dollars or more. While the silver contained in these pieces is of course inherently valuable, craftsmanship and style are what make for real differences in price, especially when it comes to high-end and elite-level pieces.
However, if you take a look at some of the shops in smaller towns, you will see that the fluctuating price of a kilo of silver has a significant market impact. The price of one kilo of silver usually fluctuates between the high 500s and the mid 600s. The shops around the church of Santa Prisca are always interesting to visit, although it may be difficult to communicate if you don’t speak Spanish.
It’d take way too much work for traditional retail stores to respond to price fluctuations by re-marking the prices in their stores from week to week. Generally, pricing is simplified by simply charging enough that shops will be safe in getting a significant margin irrespective of the price of silver that week. Some weeks, these margins can get pretty downright uncomfortable. And this is generally made up for by other weeks when the cost of production goes significantly down.
Similarly, silver producers like Santa Prisca Silver have standard wholesale prices that are not likely to fluctuate much or at all. Take a look at our wholesale Taxco silver jewelry shop for more info!