Amid all the fanfare surrounding the high prices of gold these days, silver has been setting its own shining example with steadily rising prices that soon will be reflected in higher costs to consumers.
After reaching a record high of $7.48 an ounce last Thursday, the price of silver closed yesterday at $7.02 an ounce, according to Deak & Co. Vice President Mike Checkan, reaching its highest levels since 1974.
One reason silver has become increasingly more valuable is the decreasing silver stocks in New York, Chicago and London, Checkan said.
"More silver is being used than produced," Checkan said.
Speculative demand for the metal has increased, Checkan said, shifting supplies to commercial users and speculators. Checkan added that during crises, such as in Iran, "people turn to commodities or metal."
With the Ayatollah Ruhollah Khomeini in control in Iran, "some of the people speculating in gold and silver are taking their profits now," Checkan said.
Because of increasing prices and demand for silver, consumers can expect increases in products using silver to rise soon. Besides its decorative use in jewelry and tablewear, silver is used in industry, such as in photographic film.
One Bethesda gift shop worker said he already has been informed by a silver supplier that prices on some silver products will increase by 24 percent. The merchant also said that over the past few years he has noticed a decline in purchases of silver.
For instance, he said that purchases of five-piece place settings within the last three years have all but disappeared in his store. More people are buying three-piece place settings as gifts, he said.
At Garfinckel's, however, a silver buyer said because silver is valued more now, sales have increased.
"Obviously they know its worth value," the buyer said. "It's value will continue to increase, not decrease. People know it's worth something."
The Garfinckel's buyer said that the store's silver suppliers said prices will rise 10 to 24 percent for their products.
Deak's Checkan said that people are continuing to buy from them $1,000 bags of silver coins as investments and 100-ounce silver bars.
"Commodities such as silver have been doing well because of inflation," Checkan said. "Silver will go up at least at the inflation rate."