Here's What Happened to Silver Prices During the Last Recession

By Money Morning Staff Reports / November 07, 2018 / / Article Link

The Dow Jones Industrial Average plummeted nearly 50% from peak to trough during "the Great Recession," which lasted from December 2007 to June 2009. That's why investors buy defensive and alternative investments like gold, silver, art, and wine.

These types of investments can hold, and even increase, their value no matter what else is happening in the world. It doesn't matter if unemployment is at an all-time high or there are negative interest rates.

There will always be buyers for certain commodities.

silverAnd that's especially true for silver…

Silver isn't just useful as a resource for electronics or jewelry, though that boosts its demand too; silver is also useful as a currency.

Silver was used as a currency going all the way back to ancient Greece, so it has a long history as a form of payment. Today, it's not as common or easy to pay in silver, but silver coins and silver bars are still durable and portable, two important characteristics of money.

That also gives silver added demand in times of economic crisis. If fiat currency ever becomes worthless, there would still be gold and silver to conduct transactions.

And right now, investors are wondering if they should buy silver, as they expect an impending economic recession.

Here's what has investors so worried…

Why Silver Investors Are Expecting a Stock Market Crash

There are plenty of reasons to expect economic turmoil ahead, which include:

Tariff wars between the United States and China.Trade tensions across the globe.U.S. interest rates increasing too rapidly.A slowdown in the U.S. housing market.Student loan debt reaching $1.5 trillion as of March 2018.U.S. credit card debt reaching $1 trillion in March 2018 for the first time ever.Greece's debt crisis.

We could keep adding to the list, but you're already well aware of just how bad things could get.

Urgent: This catastrophe could bring the U.S. economy to its knees – and make the Great Recession seem like a day at the beach. Read more

There are a lot of reasons why investors are expecting economic volatility and are turning to buying silver coins and bars right now.

But haven't silver prices dropped recently?

And what happened to the price of silver during the last economic recession?

Those are great questions, and we're going to answer the first one right now.

Then, we're going to show you what happened with silver prices during the last economic recession and what it means for silver prices this time around…

Here's How Silver Prices Have Performed in 2018

In 2018, silver prices opened at $15.99 per ounce.

However, they've slumped to $14.62, a 6.69% drop on the year.

To understand why this happened, we reached out to Money Morning Resource Specialist Peter Krauth.

Peter is a top authority on metals and mining stocks, and he has over 20 years of experience as a commodity guru.

And he told us silver prices traded in a range between $16.25 and $17.25 per ounce for the first half of the year but were hit hard when the dollar rallied. The dollar hit a high for the year in May. Since then, silver prices fell to trade around $14.59 an ounce.

That's the bad news for silver.

Peter also told we could see an increase in investment demand in the very near future.

You see, the smart money is starting to prepare for what's ahead…

You Won't Believe How Silver Prices Performed During the Great Recession