10 Aug How a Recession Can Impact the Price of Silver

Silver, similarly to gold, is a precious metal whose worth has been highly regarded for centuries. 

Not only is it durable, aesthetically-pleasing, and commonly found in all manner of treasured household items or jewelry, but silver in and of itself transcends most currencies found around the world.

Thus, as we enter our first economic decline since the Great Recession of 2008, one can’t help but wonder: How will this affect the price of silver today?

The Historical Relevance of Silver as a Currency

Silver’s purchasing power dates back thousands of years and is not beholden to any one form of government, rendering its worth one of historical relevance that defies boundaries in more ways than one.

Unlike flat currency (or government-printed and issued parcels of currency that are not backed by other tangible goods), silver cannot be printed or recreated on command. Rather, its value is inherent and withstands the potential decline of paper money.

Thus, silver has continued to withstand the test of time and history, remaining a relevant form of currency today — and likely to remain as such for years to come.

Silver’s Value During Periods of Recessions/Depressions

Siver’s ability to withstand inflation and periods of economic instability has rendered it a valuable commodity during periods of recession and depression. In other words, when paper money loses its value due to economic decline, silver’s value will not only remain steady, but may actually increase.

For example, during the brief recession in early 1980, the premium price of silver skyrocketed to its highest historical price to date: approximately $49.45 per ounce. By the time the United States returned to a period of stability, however, that price had plummeted to an average of $4.83 per ounce a mere ten years later in 1990.

It is important to note, however, that this is not necessarily a hard and fast rule.

For example, during and following the Great Recession — which spanned approximately 2007 to 2009 — the price of silver had a tendency to swing. Silver’s highest price reached almost $16 per ounce in 2007, only to plummet to a yearly low of about $8 per ounce in 2008 (reportedly silver experienced an annual percent change of -26.90% over the span of that year). It then shot back up to a high of $19.18 per ounce sometime during 2009.

Understanding The Value of Silver Today

Given the historical trend of silver’s value — and given that the country is once again experiencing economic instability as a result of the COVID-19 pandemic — it is not unreasonable to believe that the price of silver may again rise throughout the year.

In fact, Macrotrends, whose data is collected and compiled from the Consumer Price Index (CPI) has already reported a 50.20% annual percentage of change for silver over the last year, with this year’s high (thus far) having reached $26.89 per ounce.

But investing aside, what about those who are seeking to purchase new silver pieces for their jewelry collection? What does this mean for them, and what should they do?

Simple: This is an excellent time to seek out consignment jewelry or otherwise browse your local jeweler’s selection of silver, such as with Hemming Jewelers! Not only does Hemming Jewelers offer all manner of unique consignment pieces, but if you can’t find what you’re looking for, custom-design services are always available. To learn more, call Hemming Jewelers today at (904) 354-5959!