The term Silver Thursday refers to March 27, 1980, when a decline in the price of silver led to panic in the commodity and futures markets. Silver Thursday was the result of a failed attempt by the Hunt brothers to control the price of silver.
Nelson Bunker Hunt and William Herbert Hunt were two of the wealthiest persons in the world in the late 1970s. In 1979, the Hunt brothers began accumulating silver and silver futures in an attempt to control the market and drive the price of silver upwards. In that year alone, the price of silver would rise from around $6.00 per troy ounce to nearly $50.00, and the Hunt brothers had amassed an estimated 200 million ounces of silver.
In early 1980, the COMEX adopted Silver Rule 7, which placed several additional restrictions on the purchase of commodities on margin. On March 27, 1980, also known as Silver Thursday, the Hunt brothers were unable to meet a margin call in the amount of $100 million. This triggered a sharp selloff as well as a steep decline in the price of silver. Unable to meet their financial obligations, several banks provided a $1.1 billion line of credit to the Hunt brothers to restore stability to the commodity and futures markets.