What drives the price of Silver?

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Are the tools of your trade worth more out of your hands than it them?

Disclaimer: I am not a financial advisor and am not qualified to give financial advice. The blog post is for entertainment purposes only. 

These are crazy times. Maybe you saw the headlines with GME stock? Gamestop (stock ticker GME) has struggled in recent times, but that did not stop traders from inflating the stock to over 1500% of its fair market value. It happened practically over night as individual traders, in efforts to “stick it to the man,” worked against deep pocketed hedge funds for reasons that are too many to discuss here. As of today, the overpriced value of GME did not last as price fell within days. Nevertheless, it was a trade battle that will no doubt be remembered in the history books of Wall Street.

In a similar way, the spot price of silver commodity (the selling price of raw, physical silver) has had some of the same experience. Silver was briefly targeted the beginning of February 2021.

Silver metal cost has been steadily climbing, particularly over the last year. The recent spike in price was attributed to targeting and speculating, not unlike what happened to GME. But is there more to the story?

Just so you know, my cost to buy silver coins was up 40% in 2020! Which means, it was harder than ever to find silver coins specifically groomed for magic tricks. I tried really hard to keep my prices very close to 2019 prices… But, recently silver pricing has been getting dramatic. Fueled by emotion and heavy purchasing across the globe, I haven’t been able to keep prices down…Nor keep my US silver coin inventory in stock!

Silver jumped 20% the first weekend of February 2021. While I have literally bought and sold tens of thousands of dollars worth of silver coins, I’ve not seen prices move so crazy over night since I started managing and trading the metal a few years back. By the way, I’ve really enjoyed helping magicians around the Globe possess these historic coins.

When you start investigating the mater, there are many forces driving the price of silver. During times of uncertainty, people look for investments that they believe cannot loose value. Around stock market crashes, political turmoil, government instability, interest rate changes, dips in the value of paper currency, and yes, pandemics!…People look to invest in things that they believe will hold their value. Historically, people have believed that physical precious metals are a secure a bet to hold.

That is ultimately why, until around the 1960s, coins were mostly made out of copper, silver, and gold. Coins were not an object to be counterfeited, like we see with the Euro, because coins held physical value that was intrinsic and it would be pointless.

In particular, Silver and Gold are metals of choice because, while rare, they are some of the most obtainable with perceived value. Once upon a time, each paper dollar bill printed in the United States was backed by government held physical gold or silver bars sitting in a treasury vault, such as Ft. Knox in the USA. It’s why paper money is called a “Treasury Note.” Each piece of paper showed ownership in physical, metal property. Those rules and regulations are long gone as the GDP of most developed countries far exceeds physical metal stored in a the bank.

But for metals that were once physically used as coins, there is still real value! Historical value for collectors and magicians, as well as practical use for modern technology. Did you know, all photography and X-rays once heavily relied on silver for film development? Silver has always been used in mirrors and as a natural antimicrobial, it is used for sanitation. Now, silver is even an integral part of solar panels! As society advances, more economical replacements are being found for silver, but in every decade of humankind’s advancement there is a new use!

Turns out, the silver in your coins has great value in many modern applications. Did you know the typical iPhone has about 1/3 of a gram of silver in it? There is “gold ‘en them-there f'owns,” too. Not much gold per phone, but Apple’s phone recycling efforts recovered $40 million USD of gold in 2018! In 2021 gold is trading much higher! …Let me guess, last time you basically just handed back your phone for a trade in, didn’t you? [Insert big cheesy grin emoji.] I digress.

Anyway, as I write, the value of silver is inflated some 50-60% over last year. But maybe it’s not inflated at all. Silver might not be the story of GME, up one day and down the next. Maybe the value of silver is right where it needs to be and will continue to go higher!?

Who can say? And to be clear, I am not a financial advisor. I am just noting that currently the trend today is up. There are 9 billion people on this planet and though they are not spending silver in coins, they are using silver places they don’t even realize!

So after all that, and maybe it’s too obvious to state; silver price must partly be due to its exceptional, physical beauty. Silver can easily be sculpted and it perfectly reflects light, catching the eye. Who doesn’t like shinny things? That is just one of many reasons silver is an excellent choice for magic: to catch a spectator’s attention. It’s also an excellent color choice to catch fish. Interesting. I digress, again.

So, tuck your silver coins in tight tonight. They are a wonderful and valuable tool to make beautiful magic!

Do you use real silver or desire to do so? Have any stories of your coin’s value? Leave comments below!

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