History of Silver: What 100 Years of Turbulence Reveal About Today's Market

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Silver’s price history over the past century looks chaotic at first glance, marked by violent spikes, deep crashes, and long periods of stagnation.

But behind the volatility sits a deeper story. Silver has spent the last 100 years drifting between two identities – a form of money and a critical industrial input. That unresolved tension explains why its price reacts so sharply to major economic, political, and technological turning points.

Key Takeaways

• Silver’s volatility reflects its long struggle between monetary and industrial roles
• Major price spikes historically followed structural shifts, not random speculation
• The current market is driven by sustained industrial demand and supply constraints rather than hype

From monetary metal to economic casualty

Silver entered the 20th century as a monetary anchor. That status became a liability during the Great Depression, when global deflation crushed commodity prices. By 1932, silver fell to levels that effectively erased its monetary premium. Governments stepped in, treating silver less as a market asset and more as a policy tool, buying supplies to stabilize prices rather than letting demand decide value.

This era set a pattern. When silver functioned as money, it was controlled. When that control loosened, volatility followed.

War and the birth of silver’s industrial role

The Second World War quietly altered silver’s long-term trajectory. Copper shortages forced the U.S. government to tap silver reserves for military engineering, including critical electrical components tied to nuclear research. For the first time, silver was consumed not for coins or savings, but for performance.

That shift never fully reversed. Silver emerged from the war with a new identity – not just a store of value, but a strategic material.

The 1965 break that changed everything

The real structural break came in the mid-1960s. When the U.S. removed silver from circulating coinage, the metal was effectively released from price controls tied to face value. The move did not weaken silver. It freed it.

Once detached from fixed monetary pegs, silver began trading as a scarce commodity with finite above-ground supply. Volatility increased, but so did long-term upside.

Speculation versus fundamentals

The most famous spike arrived in 1980, driven by the Hunt Brothers’ attempt to dominate supply. That episode ended badly and left lasting scars on investor psychology. For decades, silver rallies were dismissed as speculative excess.

Yet a quieter accumulation phase followed in the late 1990s, when investors like Warren Buffett focused not on inflation panic, but on falling inventories and rising industrial usage. That period marked the beginning of the modern supply deficit narrative.

A different kind of bull market

The post-2011 cycle looked familiar on the surface, but its foundation was different. Monetary stimulus played a role, yet industrial demand steadily grew in the background. Solar energy, electrification, and advanced manufacturing turned silver into a consumption-driven metal.

By the early 2020s, silver demand consistently exceeded new supply. Unlike past spikes, prices found support not in speculation, but in usage.

Why 2025 looks structurally different

Today’s silver market lacks the frenzy of previous peaks. Instead, it reflects tight inventories, expanding industrial reliance, and recognition of silver as a strategic resource. Its designation as a critical mineral underscores a reality that has been building for decades.

Silver is no longer debating what it is. The market has decided for it.