What's wrong with goblin-forged steel? Does silver have magical properties that would make it preferable to steel? Or did J.K. Rowling just think silver sounded cooler than steel?
Because steel is an alloy and the goblins from days of yore probably hadn't invented it yet. Steel is magnetic which is rather a poor quality to have in a magical sword if your enemy can hold up a magnet and get the weapon from you.

Silver has a longer history - Greeks/Romans etc used it in medicine and it's a precious metal.

And yeah, it's far far far far cooler than steel.

Quote Originally Posted by Wiki
A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal.
It can probably conduct magic and absorb magic better than another metal. And it's harder than gold.