The Highest Price of Silver–By the Common Statistics
The highest price of silver so far was $49.50 in April 2011 on the Comex exchange. At least that is what most data sources show. By other sources, it was $50.35 in January 1980. (The difference may be because several commodity exchanges have different rates, and also spot and futures prices are different.)
But these data are missing important information. There is a big difference between the present and past, the future value of money. The difference can be determined by several methods. One is the use of inflation (changes in consumer prices, CPI.) But what was the highest price of silver in real terms? Or converted to today’s prices?
The Highest Price of Silver–Adjusted for Inflation
If we adjust the monthly maximum prices of silver with monthly inflation, it turns out that at today’s price level, silver peaked at $141.3 in January 1980. That means the $42.29 then-silver is worth $141.3 today, increased with inflation. But let’s calculate with the other peak. If we consider the highest silver price of $50.35 in 1980 to be correct, its value today is a staggering $168.2.
Nice, compared to the exchange rate of around $29,915 in August. Or around $24 at the end of last week. The reason for the difference is simple. The value of the average consumer expenditure basket in US dollars has more than tripled in the past 40 years. (The US inflation index went up to 259.9 points from 77.8 points, an increase of 234 percent.)
What Does This Peak Mean for Silver Investors?
What does this amazing silver peak mean to the average silver investor? Silver can still cause huge positive surprises. Most young people can’t remember these past events, the highest amount ever paid for silver and its current value. Only a few people have read about it. The Robinhood generation is more focused on high-tech innovations.
The Highest Price of Gold Was…
I also recently used this method to calculate the current value of gold price peaks so far. Based on the value of today’s dollar, gold peaked at more than $3,000 in January 1980. Click Gold, Inflation, All-Time Highs–Good to Know Where the Real Top Was.
Silver still lives in the minds of many people as a hedge against inflation. Also in the minds of institutional investors like hedge funds. It was a terrible idea to buy silver near $50 in the past, but it seems to be already relatively cheap today, at $20-30. Time and inflation re-evaluate investments.