SILVER 
 
 
PRICES 
857 
 
 
 
 
 Although the domestic silver price, as quoted by Handy & Harman,
remained
in a relatively narrow range when compared with the volatile prices of the
past several years, it continued along the downward trend begun in mid-1983.
The most significant price movement occurred from midFebruary 1985 through
the end of March. The price began the year at $6.14 per ounce, was $5.83
at yearend, and averaged $6.14 for the year. U.S. currency exchange rates,
crude oil prices, the U.S. economic outlook, and the potential returns on
alternative investments were the major factors in silver price movements,
according to analysts. 
 As with the Handy & Harman silver price, movement of the London
spot
price occurred within a relatively narrow range, and in general continued
along the downward trend begun in mid-1983. The London spot price as quoted
by Metals Week began 1985 at $6.25 per ounce. The low for the year of $5.45
occurred on February 25, after which the price increased, reaching the peak
of $6.75 on April 15. During the remainder of 1985, the price gradually declined,
ending the year at $5.80. The average price for the year was $6.13. 
 The Union Bank of Switzerland, the Swiss Bank Corp., and Credit Suisse,
the 
three major banks of Switzerlan& began publication of a silver price
in December to compete with the price established by the London Metal Exchange.
The yearend price established by these banks was $5.80. 
 Futures contracts representing 24.1 billion ounces of silver were traded
on COMEX, a decrease of 9.6 billion ounces from the volume traded in 1984~
The silver trading volume at the CBT declined by nearly 900 million ounces
to 1 billion ounces in 1985. During the year, the CBT received permission
from the Commodity Futures Trading Commission to trade options on its silver
futures contract. Options trading began on March 29. Each option entitled
the holder to either buy or sell one CBT futures contract representing 1,000
ounces of silver at a given price for a specified period of time. Silver
futures trading on the MidAmerica Commodity Exchange increased to 62 million
ounces from: 32 million ounces in 
1984. 
 On October 3, 1985, an article in the Wall Street Journal reported that
the Hunt brothers had disposed of most of their silver holdings. It was estimated
that most of the sales took place over a 9-month period, and may have amounted
to 54 million ounces of silver.23 
 
FOREIGN TRADE 
 
 U.S. silver exports remained essentially unchanged in 1985, probably owing
in part to the continued strength of the U.S. dollar throughout most of the
year. A strong dollar, depending upon currency exchange rates, tended to
cause silver purchased in the United States to be relatively more expensive
than silver from other sources. Canada and Japan remained the largest recipient
countries for U.S. silver, most of which was in the form of refined bullion.
Exports of refined bullion to Canada increased by 1.1 million ounces; the
increase may have been related to the increased participation of Canadian
companies in the U.S. mining industry. Exports of refmed bullion to Japan
declined by nearly 600,000 ounces. 
 U.S. silver imports for consumption increased by one-third, in part owing
to increased industrial consumption and the strong U.S. dollar. The most
significant increases in silver imports into the United 
States came from the United Kingdom, with an increase of 18.8 million ounces;
BelgiumLuxembourg, with an increase of 11.0 million; Switzerland, with an
increase of 9.8 million; and Canada, with an increase of 9.2 million. Most
of the increased imports from these countries consisted of refined bullion:

the United Kingdom, 18.9 million ounces; Belgium-Luxembourg, 9.5 million
ounces; Switzerland, 9.8 million ounces; and Canada, 8.7 million ounces.
U.S. silver imports from Peru declined substantially. 
 Imports for consumption of ore and concentrates declined significantly.
Peru, with a decrease of 7.3 million ounces, and Mexico, with a decrease
of 1.7 million ounces, were the countries with the largest decreases in ore
and concentrate shipments to the United States. 
 The United States was a net importer of 
silver. Net import reliance calculated as a 
percentage of apparent consumption was 
approximately 60%.