How the Silver Price Affects the Cost and Availability of Native American Jewelry

How the Silver Price Affects the Cost and Availability of Native American Jewelry

This article is aimed at explaining Native American jewelry prices for the buyer, investor, reseller. Read on.

UPDATE APRIL 20, 2011 SILVER IS NOW AT $45.60 SO READ THE FOLLOWING ARTICLE WITH THAT IN MIND. ARE WE HEADED FOR THAT ALL-TIME HIGH PRICE?

October 29, 2010 silver closed at $24.75 an ounce, a 30 year high.

January 7, 2011 silver opened at $30.50

How does the price of silver relate to cost and availability of Native American jewelry?

What are historical silver prices?

Well, first let’s look at historical silver prices.

Year                Price per ounce in US $ – Year Average
1940                $    .35
1950                $    .80
1960                $    .91
1970                $  1.64
1977                $  4.71
1978                $  5.93
1979                $21.79
1980                $16.39
1985                $  5.89
1990                $  4.07
2000                $  4.95
2002                $  4.60
2004                $  6.67
2005                $  7.31
2006                $11.55
2007                $13.38
2008                $14.99
2009                $14.67
2010                $18.61 average up to 10-30-2010

and on 10-29-10         $24.75

and it continues to rise. Opened January 6, 2011 at $30.50

April 20, 2011 $46.50

For live silver prices go to Kitco and refresh the screen as needed.

34 Year History of Silver Prices in US Dollars per Ounce

If you notice in the above graph, there was a huge blip in 1979-1980 (that’s the big spike toward the left side of the graph). Up until 1978, silver had been trading for less than $5 per ounce. Then in 1979, industrial silver demand became greater than available silver reserves, so silver prices began to rise. In the last quarter of  1979, it was selling for between $15-$25 per ounce. A combination of factors including some futures exchanges liquidating their position, fabrication of future silver demands, and the Hunt brothers (of Texas) trying to corner the silver market resulted in silver hitting an (artificially inflated = bubble) all-time high of  $48.70 per ounce on January 17, 1980.

Supply and Demand Affects Price

Then on Silver Thursday, March 27, 1980, silver dropped 50% in just four days causing panic in the commodities and futures exchanges. Silver prices continued to drop through the early 1980s until it was trading near its pre-bubble price of $5 per ounce by about 1985.

What a Wild Ride !!!

That’s why the Native American jewelry that was produced in the 1970’s at $1.64 per ounce silver was a great buy and appreciated in value during the 1980s.

But there was a Native American Jewelry bubble that paralleled the silver price bubble. As silver prices stabilized, so did the over-inflated Native American jewelry prices. Many people who purchased NA jewelry items in the early 1980s really paid top dollar for the items and the value of the items depreciated with each passing day – in terms of the value of the SILVER content, but not necessarily in terms of quality or work or historical value.

So when someone contacts me and says he paid $2000 for his wife’s squash blossom necklace in 1980, I’m thinking he paid top dollar. Had he purchased it in 1978 or 1985, it might have cost $500. Just something to chew on.

In the last 10 years, silver prices have increased steadily every year. Each spring since 2000, (spring is when we purchase our NA items for the year), we’ve had to pay steadily more. This past year (spring 2010) we paid approximately three times what we paid in 2000 for comparable items.

How high are silver prices headed? Some project that silver is headed to $175 an ounce or even higher. I have no idea but I know in my limited experience on this planet and in this business, silver keeps going higher and resources are limited.

Here is an interesting perspective on that if you are into that sort of thing.

$2,500 Gold Could Easily Result in $178.50 Silver – Here’s Why!

What does the high price of silver mean for Native American jewelry?

Expect to pay more, lots more. Here’s why.

First from the artists’ standpoint.

Artists purchase materials on an as needed basis. They take the materials home, do the work and hope to sell the items quickly. Many artists don’t have the capital to tie up in items that sit around. They need a fairly fast turnaround. So often they don’t even make items until they know there will be a buyer for them. The biggest Indian Market season is spring to summer.

When a Native American silver bracelet artist goes to purchase sterling stock, you can bet that he or she is going to wince at the latest price hike. AND even if they can afford to buy the silver stock, they are going to have to charge much more for their pieces and hope to move them even faster than usual. That’s why almost nobody is making any NA sterling silver jewelry right now.

BUT price is only ONE way things change. Here is what we have also noticed. Selection of sterling silver items becomes narrower.

The small items are no longer being made as they simply are not profitable – the cost of materials would require the retail price to be out of the entry level buyer – the person who is buying their first piece of NA jewelry. That means, the small pendants, earrings, and other small pieces are just not available.

The very heavy items that are solid sterling silver like the very thick Classic Twist bracelets are either not available at all or are extremely high priced.

The silver bead makers, who already spend so much time crafting each bead, now must also charge very high prices for materials. So silver bead makers typically quit producing when silver is high as they don’t feel there will be a market for their work because they will have to price it so high. Over the last few years we have found fewer and fewer Navajo Pearls available.

We do find that there are more stone necklaces available such as heishi and fetish necklaces, more inlay pieces that require minimal sterling silver for the backing, and more buckskin items. Native American artists are adaptable and ingenious, so if silver is too high, they will make other items.

But there is a silver lining in this tale. When we saw silver prices really start to climb earlier this year, we purchased all of the beads that the artists had in stock from early 2010 when the price per ounce was hovering around $18.

So we now have a large group of Navajo Pearls in all sizes, shapes and lengths that don’t appear on our website. It will take me a while to get caught up with some other things, before I get to listing those, so in the meantime, if there is a particular length of Navajo Pearls you are looking for, drop me a note using the email feature in the right hand column. (See ASK PAULA A QUESTION)

A note about our pricing. If you have ever shopped our website, you know that there might be one bracelet that is lower priced than another similar one. That is because the first bracelet might be from a buying trip in 2004 or 2005 when silver was well under $10 per ounce.

As silver prices have risen, we have not raised the prices of the items we have already listed. Here’s how we think. We purchase an item at a certain price and are happy to sell that item for a certain price. We want to make a living, not a killing. We like our customers to find these bargains mixed in with the new things we list at (eek!) the higher silver prices.

However, we DO raise prices in certain situations like this one. We bought 10 silver bracelets from an artist in 2006 for $105 retail each and when we were down to 2 left and contacted him to restock that bracelet in 2009, he wanted $220 retail each. Therefore, we had to raise the price on that bracelet !!

So prowl around our site, look for those bargains and let me know if you are looking for some Navajo Pearls that aren’t on our site because I just might have them in the box next to my desk !!

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5 thoughts on “How the Silver Price Affects the Cost and Availability of Native American Jewelry

  1. Excellent post Paula–thank you for this invaluable information! As a new collector (just over a year) this helps me understand why some items are so pricey when they are not that old. I thought that the weight of silver determined the cost, forgetting about the importance of market price. There are so many factors to consider: whether the turquoise is treated or not, if it’s American turquoise and if the mine is depleted or not; market price and weight of the metals used; labor/technique; the importance of the artist (like Loloma) and in some cases the importance of the previous collector (if the piece is from an estate sale). The more I learn the more the adage “buy what you love” proves true. If I buy something at the top of the market for investment purposes it may be a lifetime before any appreciation is realized, whereas if I buy something because I love it, there is already an instant appreciation because I value the piece on levels other than its monetary value. What’s drawn me to NA art is the beauty of the art, the artists themselves and the spiritual value I get from the pieces I’ve be lucky enough to acquire.
    Best, Lenora

  2. Great to see you Lenora and thanks for the great insights !!
    When I am choosing jewelry for the store, I look at price a little bit more while still focusing on CLASSIC STYLES and QUALITY.
    But when I’m choosing for myself, like you said, if you buy what you love, it is already appreciated !!!
    I’m glad the article was helpful because sometimes there is confusion with buyers when it comes to prices so I thought I’d provide a little more behind the scene picture.
    With exceptional pieces, of course, the silver price has very little to do with the items final price – it is more due to the workmanship and artistry….and stones if they are used.
    Paula

  3. Hello,
    Nice article. Where do you think the current Silver bull market will reach the top and when?
    Possibly $250 an oz. by 2015?

  4. Pingback: The 1970s Native American Jewelry Boom | Native American Jewelry Tips

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