What silver's history actually shows

From money to commodity

Silver circulated as coin for most of recorded history. The Coinage Act of 1873 ended free coinage of silver dollars in the United States, and US coinage silver content was removed in 1965. What remains is a metal with monetary memory that now prices largely off industrial and investment demand.

Two spikes worth studying

January 1980 saw silver spike near $50 during the Hunt brothers' attempted corner and the era's inflation, then collapse for two decades. April 2011 produced a second run near $50 in the wake of the financial crisis, followed again by a long, deep decline. Both peaks were brief; anyone who bought them waited years.

• Silver rises further than gold in upswings and falls further in downswings
• Its market is far smaller, so the same dollar flow moves it more
• Peak prices are thin and short-lived, not levels you can count on selling into

The industrial half of demand

Roughly half of annual silver demand is industrial — solar cells, electronics, brazing, medical uses. That ties part of the price to the manufacturing cycle, which is why silver can fall in a recession even when investors are buying gold.

Reading the gold-silver ratio

The ratio is simply how many ounces of silver one ounce of gold buys. It has ranged widely in the floating era, and holders use it as a rough gauge of whether silver is cheap or expensive relative to gold, not as a signal with any guarantee behind it.

The honest lesson

Silver has protected purchasing power over long spans and punished short horizons. It suits a holder who can sit through a decade of nothing, and it does not suit money that may be needed soon.