Silver prices expected to soar past $20 an ounce

Ray Jones dumps scrap silver into a bag at Indian Jewelry Supply Wednesday. Customers at the store can sell their scrap pieces of silver back to the store for store credit or cash. Some Wall Street experts predict silver's market price to approach $20 per ounce soon. Indian Jewelry Supply manager Ed Smith said last time silver prices skyrocketted in the 1970s he saw people selling family jewelry and silverware for scrap at his store. [Photo by John A. Bowersmith/Independent]

By Natasha Kaye Johnson
Diné Bureau

GALLUP — If people think the price of silver is expensive now, they should just wait until summer.

Although there was a decrease in prices Thursday, with Handy & Harman prices closing at $12.61, off $0.44 an ounce, there are actually predictions that the price will nearly double again, and hit between $20 to $30 an ounce come the summer months.

Within the last year, price of silver surged to a 25-year high of $15.17 last week, a jump of 117 percent over the past 12 months. And its highly unlikely that the prices will go down any time soon.

Ed Smith, Sales Supervisor at Indian Jewelers Supply, said there was a prediction that silver would definitely go up this year, but the increase was predicted to be at about $8 to $9 an ounce this month, not in the $13 range that it is now.

As for the slight decrease yesterday, it was due to late selling in the U.S. metals trade, and brokers are telling people not to read too much into it, since it was only an end-of-the-day liquidation.

After the increase took place, IJS employees were expecting business to slow down, but it is still going steadily, although people are purchasing fewer ounces.

"It's just like (buying) gas now," said Smith. "They have to buy less."

Despite the rising prices, Smith said they still get business.

Rising oil prices, rising silver prices
Although there are predictions of a price increase, Smith said they are not too sure what to expect, since the market changes everyday.

"It depends on what happens overnight," said Smith. "It depends on the war (and the cost of oil)."

Because crude oil prices continue to soar, the cost of gold increases as well since it is being used to pay for oil. And following the increase in gold is silver.

Smith, who has worked at IJS for over 30 years, knows many of the silversmiths and jewelers on a first name basis. Thought not many, Smith said that a few of them have decided to seek temporary work and put their silversmith work on the back burner until silver prices goes down. But the silversmiths have no plans to stop making jewelry.

"They're still holding on to their silver projects," said Smith.

Smith has also noticed more people coming in to trade their silver in exchange for cash, since they are having a hard time selling and making a profit. Others have resorted to lower quality base metals, like nickel, brass, and copper, where there has been a surprising surge in sales. But the cost of those metals is expected to rise soon also.

"It will go up 30-80% in the first part of June," said Smith.

Unfair pay
Though silver prices are going up, some customers have expressed to Smith that there are some traders who are not taking the increase in silver into consideration when buying pieces.

"They complain to us about their buyers," said Smith.

Because artists are not being offered fair pay for their work, more of them have started to sell and vend on their own at places like Earl's and the flea market.

With summer around the corner, rising gas and silver prices are also expected to put a dent in the pockets of many artists since many will have to minimize their travel and be selective about where they sell.

The cost of silver has also caused misplaced blame from some customers. IJS has had people, who aren't familiar with the stock market, accuse the store of overcharging for silver.

"They think the prices are changed locally," said Smith. "We tell them we have no control over that."

Smith said that most people who have been in the business have been in the business long enough to understand that the prices are based on the stock market.

Being a silversmith and working in the silver industry his whole life, Smith recalls when silver was $2 an ounce in 1974, and surged to over $50 an ounce in the 1979 when the billionaire Hunt's brothers from Texas attempted to corner the market.

"That put a lot of craftsmen out of business," he said.

But still Smith couldn't help but reminisce when people were able to literally buy silver in bulk.

"People used to buy crates," he said. "Now its down to like 5 inches."