The number says it all- today Silver prices shot up over $45 dollars an ounce. I've never seen it so high- well, never have been really tuned in when it was high before...
In late 1979 I was in 8th grade, in Durham New Hampshire. We had just moved there from Newark Delaware a few months before. One of my memories of that time was a discussion that happened in one of my classes about the rising cost of silver- This was the time when "the Hunt brothers" (Nelson and William Hunt) attempted to corner the world market in silver. Prices from Sept 1979 to January 1980 silver prices rose from $11.00 and ounce to $50 an ounce.
I recall one of my classmates very excited by this because he and his brothers had been given silver stock as a confirmation gift earlier that year. At the time- the rise in prices didn't mean much to me- it only left me with a pang of "missed opportunity" and a renewed interest in my mother's jewelry box.
However- this price increase that we are going through now is making me think very differently- I am now in my 25th year of working as a silversmith- I use silver every day, and it's price makes a huge difference to me and my business. I have a couple of shops online where I sell my silver and mixed metals designs- I chose to work in silver because it was an affordable way to start a career in jewelry. I also love silver's color and workability- It's one of my favorite materials- and it keeps getting more and more expensive to buy! which, in turn forces me to increase my prices in my shop...
Why? because I have to think about replacement cost of my work- if one piece sells, I need to replace it- even if that piece originally cost me $20 to make, with the increase in metals prices on the market, my replacement cost increases as well. In essence, if I sell a piece for the material cost when the silver prices were in their $20's, I would take a loss- because the piece couldn't be replaced for that price anymore...it would be replaced at the current price of metals (plus manufacturing cost)
Wait....what? Manufacturing cost? That's right!- Manufacturing cost is added to metal when we go to the silver supply store and buy silver. You see, the metal has to be alloyed (alloying is when you take a pure metal and you add another metal to give a certain characteristic to the metal- for instance sterling is 92.5% pure silver mixed with 7.5% copper), Then the manufacturer makes the alloyed metals into forms, like sheet or wire. We metalsmiths in the US usually buy our sterling in these manufactured forms. (there is an argument also for making your own alloys, but that's a different subject all together, which I will leave for another time)-So, if metal prices are at 40$ an ounce- we are paying $40 plus manufacturing cost (which is variable, depending on the manufactured form) for our supplies...that's a great deal different than a few years ago when we thought $10 an ounce was outrageously expensive!
So- as each trip to the silver store gets more and more expensive, I find myself faced with a dilemma- do I buy more silver? will it go up even more? can I afford to invest in more supplies right now, or do I have to re-consider my materials?
Well, I'm doing a little of everything- I'm not swearing off of silver completely- It is really a necessity for certain items like rings and earrings- But I'm not "stocking up" either.
It's a game that many 'smiths are engaged in right now, whether we want to be or not- the silver lining (no pun intended, but it's a good pun, huh) is that the rise of metals prices will have an effect on the value of skilled work. Hobbyists who have been flooding the silver jewelry market will be looking at their hobby supplies differently- due to the high "start up" cost of silver.
I believe that in the coming months there will be a further separation of professionals vs hobbyists, similar to the separation between those who work exclusively in gold vs those who work in silver. Effectively raising the perceived value of silver as a metal, and the idea that it is a metal mostly used by professionals.
I could be wrong, but that is where I see the trend heading.
That being said- I don't believe that this augmentation of silver prices will make "silver smithing as a hobby" become a thing of the past- it's just becoming more expensive to "start"- and therefore less new (inexperienced) craftspeople working in silver on the market.
My hope is that those of us who continue our silversmithing will raise the level of silverwork to a new level of craftsmanship- Therefore giving "new polish" to one of humankind's oldest crafts.
and, with that off my chest- I'm heading out to my studio to make some beautifully crafted pieces... in silver!
ciao- Maureen BZ