Silver Price in the 1990s

The decade opened with the tail end of the 1980s decline still running: averages slid from $4.83 in 1990 to $4.04 in 1991, when the market touched a 20-year low, and bottomed at a $3.94 average in 1992, the cheapest year of the decade. A 23 percent recovery in 1994 lifted silver back above $5, and the middle years settled into a tight $4.89 to $5.28 range.

The one jolt came in 1997, when Warren Buffett's Berkshire Hathaway quietly bought roughly 130 million ounces, one of the largest private silver purchases ever, citing simple supply and demand. The 1998 average of $5.54 was the decade's highest, but the effect faded quickly and 1999 slipped back to $5.22 as investors poured into technology stocks instead.

Silver had lost both of its traditional constituencies at once. Inflation hedging was pointless with CPI low and bonds paying solid real yields, and the monetary role was a memory: no major country had silver coinage left to support demand. Meanwhile years of accumulated above-ground metal kept flowing back to the market, and with no exchange-traded funds yet in existence, there was no convenient investment channel to absorb it.

The result was a market priced almost purely off industrial and photographic demand. In inflation-adjusted terms the decade was even cheaper than it looks: real annual averages ran between roughly $8 and $11.50 in today's dollars, among the lowest of the modern era, as shown on the inflation-adjusted silver price page. The revival came the following decade: silver in the 2000s.