World price of silver

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September 2015

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IBISWorld Business Environment Report World price of silver

September 2015 Estimated Value in 2015: $15.75 per troy ounce 2010-2015 Compound Growth: -4.9% Forecast Value for 2020: $16.36 per troy ounce 2015-2020 Compound Growth: 0.8% The spot price of 99.9% pure silver on the New York Mercantile Exchange, as reported by Handy & Harman, represents the world price of silver. Annual figures presented in this report are the equally weighted averages of monthly means. Data is sourced from The World Bank and measured in current dollars. Current Performance Like gold, silver is often used as an investment instrument, usually as a hedge against movements in the value of currency. As a result, investment in silver, and therefore demand for silver, increases during recessions because investors want to hold solid commodity assets instead of more volatile stocks and bonds. But unlike gold, silver has a wide array of practical applications, chiefly in the industrial and medical sectors. On the industrial side, it is used as the catalyst for oxidation reactions that form the first steps in creating polymers and polyesters. On the medical side, its antimicrobial effects are harnessed in everything from simple bandages to catheters and breathing tubes. The use in the medical sector remains relatively unaffected by swings in the economy because demand for medical services is relatively independent of general economic performance. However, the demand from the industrial sector moves directly with the performance of the economy.

World price of silver

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Prior to the recession, the worldwide demand for silver jumped due to the rapid industrialization of countries like China, India and Brazil. However, supply did not increase proportionally because the low price of silver since the mid-1980s had discouraged further exploration and production expansions. Because the amount of silver needed around the world for industrial use grew while supply held relatively steady, the price also increased. The price rose from a $4.91 per troy ounce (/toz) average in 2003 to a $13.41/toz average in 2007, an increase of 173.1%. As the world economy entered recession in the second half of 2008 and 2009, demand from the industrial sector dropped off, but investor uncertainty in the economy increased investor demand for silver. Consequently, the price declined just 2.1% over 2009. Furthermore, the price was buoyed by a quick recovery of industry in China, India and Brazil. Silver demand from the United States for industrial use continued dropping in 2010, but strong demand elsewhere drove the price up 37.5% to a $20.20/toz average. Aiding the increase was the reluctance of investors to relinquish silver investments as the global economic recovery remained slow and a double dip recession remained a threat. These demand increases were not supported by supply increases because exploring new mining sites and getting mining production up and running takes several years. As a result, production has yet to increase significantly since the price jumped in the mid-2000s. Although the supply shortage drove a steep price increase in 2011, prices cooled down during 2012 as the global economy slowly improved and investors moved away from holding silver. These trends continued over 2013, further driving down silver prices. The Fed also wound down bond-buying programs in late 2013, thereby lowering demand for silver as a store of value during times of currency uncertainty. As a result silver prices fell another 20.0% in 2014. Additionally, as the global economies experiences significant volatility due to a decline in the rate of growth in China, commodity prices in general and the price of silver in particular is expected to fall a further 17.4% in 2015. Consequently, over the five years to 2015, IBISWorld expects the world price of silver to fall at an annualized rate of 4.9%. It is important to note that silver prices have been highly volatile during the period. Moreover, the appreciation of the US dollar has contributed to a decline in silver prices. Commodities priced in US dollars, such as silver, tend to have an inverse relationship with the value of the dollar. As the dollar appreciates relative to other currencies, silver becomes more expensive abroad, putting downward pressure on prices. Outlook Over the five years to 2020, the price of silver is expected to increase, albeit slower than in the years leading up to the recession. As stated earlier, mining exploration and development is a long process. However, production increases should be seen in the next few years because additional exploration and development began between 2004 and 2006 when the price started to rise. This will relieve some of the upward pressure exerted by industries around the world as they continue to shake off the lingering effects of the downturn. Nevertheless, silver is an important industrial metal and rising industrial production across the world will stimulate price growth. Consequently, the world price of silver is projected to increase an average of 0.8% per year in the five years to 2020.


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1980 1985 1990 1995 2000 2005 2010 2015 2020



Year $ per troy

ounce % Change

1980 20.58

1981 10.52 -48.88

1982 7.95 -24.43

1983 11.44 43.9

1984 8.14 -28.85

1985 6.14 -24.57

1986 5.47 -10.91

1987 7.01 28.15

1988 6.53 -6.85

1989 5.50 -15.77

1990 4.82 -12.36

1991 4.04 -16.18

1992 3.94 -2.48

1993 4.30 9.14

1994 5.28 22.79

1995 5.19 -1.7

1996 5.18 -0.19

1997 4.89 -5.6

1998 5.53 13.09

1999 5.25 -5.06

2000 5.00 -4.76

Year $ per troy

ounce % Change

2001 4.39 -12.2

2002 4.63 5.47

2003 4.91 6.05

2004 6.69 36.25

2005 7.34 9.72

2006 11.57 57.63

2007 13.41 15.9

2008 15.00 11.86

2009 14.69 -2.07

2010 20.20 37.51

2011 35.26 74.55

2012 31.14 -11.68

2013 23.85 -23.41

2014 19.07 -20.04

2015 15.75 -17.41

2016 15.87 0.76

2017 15.99 0.76

2018 16.12 0.81

2019 16.24 0.74

2020 16.36 0.74

2021 16.51 0.92



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World price of silver

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