Over the last decade silver prices have been less volatile than gold and, with the exception of a huge surge in April 2011 when the price of silver in the UK reached almost $50 per ounce and remained at around $30 until April 2013, the price of silver has remained around the $15-$20 mark. Unlike gold prices, the price of silver is influenced by the mining of other commodities including copper. However, as a precious metal it does (to an extent) follow the trend of gold prices. As a result, investing in silver is seen as a traditional bedfellow to investing in gold and further diversifies an existing investment portfolio. With the recent tumultuous activity of traditional paper assets, physical gold and silver is commonly being seen by many investors as a sensible way to create financial security by balancing an investment portfolio.
We provide regularly updated charts for the price of silver in the UK and you can also access historical records for the last ten years.
More commonly, silver is extracted from copper, zinc and gold ore and is therefore linked (to an extent) to the prevailing markets for these three metals. In very simple terms, all commodities follow the basic rule of supply and demand and silver is no different. As a precious and rare metal, silver has an inherent value that is rising in response to the growing realisation that silver resources are, not only finite, but more limited than was originally estimated. Silver is also the most conductive and malleable metal available and has a number of uses in a variety of industries including photography, electronics and the growing photovoltaics market.
With its inherent antibacterial properties, silver is also widely used in the pharmaceutical industry. With many of these uses of silver being single-application and the metal not being recycled combined with a rising demand and finite supply, investment in silver is regarded as having good growth potential in the long term.
Other factors which influence the price of silver include:
- Global inflation;
- Currency markets;
- Interest rates;
- Indirect pricing of other commodities.
Due to silver production correlating to copper mining, a decline in the copper industry, notably with new house building, can influence silver prices.
From its first known use in Turkey around 700BC as a currency, silver has been linked to the wealth of the developing world and played an influential part in our history. Silver has been found in the form of silver coins, jewellery and adornments, including tomb decorations, from as far and wide as China to Babylonia.
The price of silver in the UK has a long history and underpins the current name of the British currency unit; one pound of sterling silver was originally equivalent to one British pound. And the silver price in GBP is not the only culture that has used this metal to derive their currency. There are 14 languages where silver quite literally translates as money. In Cantonese, the word for cashier translates as silver collector and during the Qing and Ming dynasties the word for money was ‘silver ounce’. In French, argent means both silver and money.
When global currencies began to reject the gold standard and move towards a flat currency, notably the U.S. in 1971, silver prices (and gold) began to rise. Famously, the Hunt Brothers (oil billionaires in the U.S.) tried to corner the market and created a huge surge in prices from a price of $6.08 per ounce in January 1979 to a high of $49.45 per ounce just 12 months later. Already holding around a third of the world’s supply of silver (net of government reserves), the brothers borrowed heavily to finance a sweeping hoard of silver. The impact on the market of inflated silver prices was met with opposition and the COMEX placed heavy restrictions on commodity purchases. The resulting drop in the price of silver caused a panic known as Silver Thursday which saw the price fall by 50% in just four days and left the Hunt Brothers unable to service their debts.
Whilst the recent silver markets have been less volatile, the silver price in the UK has seen some peaks over the last decade including the surge in 2011. A common reaction to falls in traditional economies, the rush to secure defensive commodities like silver and gold caused a spike in the price of silver from April 2010 of $18.65 per ounce to a price of $47.91 per ounce in April 2011.
Quite simply, silver is less rare than gold and, historically, the price of silver has been up to 15 times lower than gold. As a result, the low silver price in the UK offers a good way for investors with a limited budget to start their precious metal holding. It also provides seasoned investors the opportunity to diversify their portfolio to create greater stability with their assets.
Here at Physical Gold, we can provide you information regarding the prevailing silver price per ounce and offer solutions for your investment needs. You can also stay up to date with factors affecting silver prices in the UK with our market news, information and tips blog.