by Jake Woolley, Exclusively for Fire Mountain Gems and BeadsĀ®

Have you ever paid attention to those boisterous TV commercials offering to buy your gold and silver? There's a good reason why precious metal buyers are becoming more abundant and it has to do with demand and price increases.

Now, before any of us pawn grandma's silverware, it may be important to know more about silver, and the impact it's having on jewelry makers. In the precious metal family, silver is next in line behind gold, and in recent years silver has been going through a noticeable pricing growth spurt.

While gold prices have been surging for years, silver prices have recently been playing catch up following the current economical demand. As the need for raw material silver increases, so does the value of finished pieces like jewelry. Even though gold continues to be more expensive than silver, the price increase percentage for silver has surpassed gold, showing that silver prices are rising much quicker.

Data as of July 2011

We know that silver is a precious metal used to make beautiful accessories, but it's also a very important industrial metal often used in electronic equipment, batteries, solar panels, paint, cutlery and even water purification and some medicines. This demonstrates that the various demands for silver plays a huge role in the price increase and hits several markets well beyond the jewelry-making industry.

If we think back to high school economics, we'll remember the importance of the supply and demand equation. If there's a demand increase, in our case silver, and supply remains the same, since silver is a non-renewable resource, it ultimately leads to higher prices. The increase in silver demand and prices can be linked to basic economic factors such as changes in consumer preferences, household incomes, future expectations, number of silver buyers, product availability and prices of substitute goods.
The Increasing Demand of Silver

The Increasing Demand of Silver Despite the jump in silver prices, retail and online jewelry sales have continued to see a growth over the past few years. Successful jewelry sales indicate that the general public realizes the profitability in broadening their assets to material wealth that holds its value. This isn't a huge astonishment for industry experts, as silver has been a longtime favorite material for jewelry artists to work with, and customers continue to value silver as a versatile and fashionable metal.

Lately, silver has been standing toe-to-toe with gold, opening up investment possibilities for consumers and jewelry makers alike. As silver prices fluctuate and jewelry-making budgets tighten, the key is to find a healthy medium between affordable jewelry-making products and items that customers will purchase for pleasure and investment purposes.

As a company, Fire Mountain Gems and Beads realizes the value silver products bring into handmade jewelry pieces. This is one of the reasons why the company continues to carry a huge selection of silver products and offer prices that won't diminish a working budget. With thousands of sterling silver, silver-filled and silver-plated products in stock, customers know they can still create and sell incredible jewelry pieces for a profit. The recent addition of sterling silver-filled wire and findings has helped bridge the gap between silver-plated and sterling silver, once again expanding the design possibilities.

Even as silver pricing surpasses $40 per troy ounce, the demand for silver products will remain high. Consumers are now more inclined to see the value in their silver accessory purchases and jewelry makers will find ways to capitalize on the silver sales boost.

Foreign currencies and precious metals markets fluctuate weekly according to the London Spot Market. Click here to view current Precious Metals Pricing.


Customer Comments

We would like to share some of the customer comments we received in response to the article, "The Increasing Demand of Silver," featured in a newsletter. Please keep in mind that the comments expressed below are those of our customers and do not reflect the views of Fire Mountain Gems and Beads.

"The featured design on this one is so pretty! Just had to share :)"
- Anonymous

"So true!! I love the insight and the reality charts!"
- Marlene

"Concerning your article on the price of silver, I do not understand why the price of silver should be on the rise. The number one reason is since the advent of computed and digital radiography, which no longer uses silver, has drastically slowed down in the last 8 to 10 years. Of course the silver needed for flatware is still in demand, but overall, prices should be lower due to this reduction of silver use. Personally I call this price gouging for the customer because the common consumer doesn't realize that film contains large amounts of silver. Too bad."
- Carol

"I will send this to my customers when they wonder why silver jewelry and ornaments are so expensive now!!!"
- Kat

"Super information for me! This kind of info is extremely useful for anyone who doesn't follow the prices of precious metals. Thank You!!!"
- Maggie

"Very helpful and informative!!"
- Anonymous