Historical Yearly Average Silver Data 1913 thru 2008 Download
In 1973, the “Hunt Family” of Texas, possibly the richest family in America at the time, decided to buy precious metals as a hedge against inflation. Gold could not be held by private citizens at that time, so the Hunts began to buy silver in enormous quantity.
In 1979 the sons of patriarch H.L. Hunt, Nelson Bunker and William Herbert, together with some wealthy Arabs, formed a silver pool. In a short period of time they had amassed more than 200 million ounces of silver, equivalent to half the world’s deliverable supply.
When the Hunt’s had begun accumulating silver back in 1973 the price was in the $1.95 / ounce range. Early in 1979, the price was about $5.00 — Late 1979 / early 1980 the price was in the $50’s, peaking at $54.00 per ounce.
Once the “Silver Market was Cornered“, outsiders joined the chase but a combination of changed trading rules on the New York Metals Market (COMEX) and the intervention of the Federal Reserve put an end to the game. The price began to slide, culminating in a 50% one-day decline on March 27, 1980 as the price plummeted from $21.62 to $10.80.
The “Collapse of the Silver Market” meant countless losses for speculators. The “Hunt Brothers” declared bankruptcy. By 1987 their liabilities had grown to nearly $2.5 billion against assets of $1.5 billion. In August of 1988 the Hunts were convicted of conspiring to manipulate the market.
One other experience in the “Silver Bubble” worth noting, according to author Edward Chancellor (“Devil Take the Hindmost”), is the experience of an official at the Peruvian Ministry of Commerce, employed to hedge his country’s silver production, who lost $80 million by illicitly selling silver short. Said Chancellor, — although a relatively small sum for a sovereign nation, it was an omen the “Rogue Trader” had appeared on the modern financial scene.
The stock market had its own troubles during the rise and fall of silver. The Dow Jones peaked on February 13, 1980 at 903.84. The day of the collapse, March 27th, the Dow closed at 759.98, a decline of 16% in just 6 weeks. [However, intra-day, the loss between the 2/13 high of 918.17 and the 3/27 intra-day low of 729.95 was actually 20%.]
For many traders the collapse in silver was the final straw for a stock market already under siege from worries as diverse as the Iranian hostage crisis, the Russian invasion of Afghanistan and soaring interest rates. [The consumer price index climbed at a 13% rate for 1979. The prime lending rate hit 22% in early 1980]. But by the year’s end, the whole decline was almost forgotten. The Dow ended the year at 963.99, thanks in large part to the euphoria over the election of Ronald Reagan.
Download Yearly Average Silver Price Data 1913 thru 2008 in Excel format.
Tags: Collapse of the Silver Market, COMEX, Devil Take the Hindmost, Dow Jones, Fall of Silver, Federal Reserve, Gold, Hunt Brothers, Hunt Family, New York Metals Market, Rogue Trader, Ronald Reagan, Selling Silver Short, Silver, Silver Bubble, Silver Market was Cornered, Soaring Interest Rates