I did quite a bit of research on Google and various forums with no luck. I have at least put over one hundred hours or close to it into Daggerfall from various characters and I have yet to see any silver reside in a chest or drop off an enemy corpse. Regardless I need silver for both recipes. Is it just that rare to find? Do I need to find a certain ingredient merchant who sells silver?

Any information would be very helpful.

It drops occasionally as loot, but your best bet is going to be Alchemist shops. Failing there, you can check stores. Jewelry Stores would be more likely to have it than General Stores. Pawn Shops might also be a good place to check since they'll carry almost anything.

Pawn shop had it for me. Thank you so much for the answer.