Amid tariffs, geopolitical tensions, and conflicts in the Middle East and Ukraine, investors have been flocking to buy precious metals as a hedge. Strong industrial demand, particularly from solar panel manufacturers, has also provided extra support for silver prices. This year, silver prices have surged by nearly the same margin, rising by 27%, reaching the highest levels in over a decade.
According to a report by The Wall Street Journal, unlike gold primarily used for wealth preservation and jewelry, about 80% of silver demand comes from manufacturers. Analysts predict that trade wars and the rollback of renewable energy incentives could harm silver demand.
When the trade war began in April, silver prices plummeted along with stocks and other assets like oil, while investors heavily bought into gold. However, this month, silver prices have rebounded strongly, prompting a surge in the number of silver sellers heading to coin shops, metal dealers, and jewelers to liquidate silver coins, silverware, and silver bars.
Investors are now betting on further increases in silver prices. The exchange-traded fund iShares Silver Trust, which trades in silver bars, has gained popularity among individual investors. According to fund documents, the fund has increased its silver holdings by nearly 11 million ounces this year to meet demand.
Some people opt to directly hold silver. Andrei Hnedchyk, the owner of “Honest Coin Shop” in New Jersey, reported a roughly 20% increase in foot traffic, mainly driven by silver hoarders looking to hedge against economic uncertainty.
Russ Bega, Chief Operating Officer at Chicago coin dealer Harlan J. Berk, mentioned that despite high silver prices, many customers continue to make periodic small purchases of silver, fearing they might miss out on the upward trend.
On the other hand, some are rummaging through their belongings to find silver to sell. The surge in silver prices has prompted people to sell inherited or no longer needed jewelry.
With silver prices on the rise, people are scouring coin jars for old dimes, quarters, and half-dollars. Pre-1965 quarters (made of silver at the time) now have a melt value of over $6.50 each.
For those who prefer not to sell their silver, Florida Governor Ron DeSantis recently signed a bill allowing certain gold and silver coins to be used as legal tender alongside traditional currency.
Daniel Herzner runs an antique jewelry business in White Plains, New York. He mentioned that his phone has been ringing off the hook with customers eager to sell inherited or unwanted jewelry and silverware.
Even with this year’s continual rise in silver prices, it may not surpass the record of $48.70 set in 1980, adjusted for inflation, that would be over $200 today.
In 2011, during a speculative frenzy, silver prices soared again, reaching $47.99, equivalent to around $69 today.