The rise in silver price has been fun, but what is next?
edsondl
Posts: 390 ✭✭
Silver has had a significant increase in value over the past 12 months.
My point to discuss is, "What is next?"
Other than in 1972 when silver hit a peak at about $6 and retreated 30% down to about $4, there is no prior evidence that silver is able to increase price and then slow churn upward, or even trade sideways in a stable manner, for any period of time.
It always seems that silver has a spike to a blow off top followed by a significant pullback for multiple years.
Outside of hope, what evidence is there that silver will behave differently this time?
Based on the pains felt by the shorts, which is about a month worth of annual worldwide silver production at COMEX currently (and not knowing how much of the short position is just hedge by mines for silver that is currently in production), at some point some it feels like capitulation by the shorts under squeeze will occur. The classic blow off top will follow to a high which is 50-100% higher than here and a pullback drop of 60% or more.
Why won't silver follow its historical MO and instead behave in a more stable manner when it hasn't been stable at any time in the past?
Comments
Silver prices have been volatile for decades.
The future? The fundamentals call for higher prices. There's only one thing that can drastically reduce the price: Bullion bank shenanigans. It's happened before, it'll happen again. I believe the big banks that hold physical silver are looking to cash in. . . when the price is right.
Velocity, Not Valuation Defines A Bubble.
I don't believe silver will ever dip below 100 again and it crossing this threshold is imminent.
Hang onto your hats because this is one of the first stages of the coming and ongoing rationalization created by AI.
COPPER is gutter !
You have to ask yourself, "what's different now than in 1972?"
Just about everything.
I knew it would happen.
IDK what's next, but right now silver be BOOMIN!®. BR!
Philippians 4:4-7
silver will get hammered before it reaches 100. It will reach 100, but not this time around.
Velocity, Not Valuation Defines A Bubble.
Never thought I'd see the day that an ounce of silver was worth more than a barrel of oil.
Velocity, Not Valuation Defines A Bubble.
Oh rubbish...even silver mining company CEOs -- like the one on CNBC today -- say that is garbage. There are lots of silver stocks that you aren't accounting for and many new supplies are coming on-stream as derivative products of copper, gold, and other mining operations.
Things change. If you had told people in 1980 that silver demand for photography would go down 90% in 25 years, they would have laughed at you.
While silver is important as a key strategic metal right NOW....things can change. The catch-up nature of this move is becoming a bit alarming as is the parabolic move up the last few months.
Happened in 1980, 1999, and 2020.
If you're bullish or want to root for higher prices, hope for a flat-lining "time-out" that lets the price base for a few weeks/months and then rises more.
How do you know they didn't cover already....or offset any short with long futures.....or OTC derivatives....knock-out options....etc. ?
Things change. Nobody follows Odd Lot Shorts anymore, right ?
Shenanigans, nooo way 🙄
Using Brent as a global oil price, now is the first time an ounce of silver exceed the price of a barrel of oil. Got close in 2020 at a ratio of about 0.75. Previous peaks were about 0.55 (2 to 1) in 1988, 1999 and 2016. The 1980 price is an anomaly due to many factors, as evidenced by the almost immediate 90% price collapse and 2 decades long bear market.
The question should be "what the economic conditions leading up to and just after those time periods"?
Knowledge is the enemy of fear
Would be better to see a true backwardation scenario where we know we have about 4-6 weeks to make a move.
Knowledge is the enemy of fear
Higher prices are bringing new production online and will curtail demand.
But an entire year's production is worth a paltry 70 billion dollars. That's less than $10 for every living human being who is each demanding to be hooked up to a grid that cost all the money in the world. This grid uses more silver in more ways to operate and to be maintained.
In the past nobody cared and the warnings went unheeded but there's a change now. Russia can acquire all the silver with chump change. It's so low cost that it will be little more than a rounding error to purchase and store all the silver they see. If it were only Russia it wouldn't have to be a problem because there's lots of silver beyond their purchase but more entities are joining the buy and hold bandwagon. Remember Musk bought his own silver mine to supply his needs. I just don't know of any force on earth that can stop this other than;
Reducing consumption significantly
Increasing production significantly.
Or dramatically higher prices to discourage buying.
The first two appear unlikely to be able to arise in any meaningful way. Even if there were significant improvement the fact would remain that new uses for silver are increasing geometrically so such improvement would just be a stop gap and during that time why would anyone stop buying?
This situation is explosive. There has never been a time that there are no sellers and only buyers and this problem is exacerbated by the fact everybody on earth is going to need silver to live for now on.
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It's very difficult to know how much silver is in the grid so we can estimate how much is needed going forward. I'd guess we're crossing the .25 Ot area at this time. Everybody needs about $16 worth of silver to live in the modern era whether he lives in New York or Pakistan because we're all interconnected. It's an hour's work at minimum wage. In 1990 it was .03 Ot and it was a few minutes work at minimum pay.
At current prices it can't become .5 Ot in the foreseeable future because there isn't enough silver in the world. Even then life saving medications will still be made because of their tiny usage of the metal. No matter how expensive silver is it will comprise a tiny part of the cost to a pill that costs pennies to produce.
When there's not enough silver where do you cut back? How do we move forward? Why did we allow this to happen?
Perception of the value of silver changes with its price making it a giffin good. When it drops it is sold by tired longs and when it goes up people think it must be worth more than they figured. The price is volatile as it seeks the vector sum of every market participant's beliefs which themselves tend to reflect changing conditions.
I believe it will be quite stable at some point in the future but at far higher levels. It will be stable because for the first time price won't be set so much by sentiment as by fixed supply and demand. Of course it won't stay stable because when real progress is made toward mining the seas or bringing it from asteroids it will tank again. Unless there are breakthroughs in material science to give us much stronger materials it will likely be at least ten years before significant amounts are recovered from the sea. Never underestimate human inventiveness or the power of vast profit to spur development and making do with existing technology. Just pull your money out in a few years and put it somewhere more productive. Do it when it's high not after a drop. Buy something that's cheap and upcoming.
AI will have a calming effect on all markets but they will always oscillate.
Copilot-
Refined Response to @derryb;
Silver’s price pressure isn’t just speculation—it’s structural.
⚡ Scale mismatch: An entire year’s production is worth only ~$70B—less than $10 per person—yet every person is demanding connection to a grid that consumes silver in countless ways.
🌍 Strategic vulnerability: Russia—or any state actor—could corner the market with pocket change. Musk already secured his own mine. Others are joining the buy-and-hold bandwagon.
🔒 No easy escape:
Reduce consumption significantly.
Increase production significantly.
Or let prices rise dramatically to discourage buying.
The first two are implausible at scale. Even if production improves, new uses for silver are multiplying geometrically. Why would anyone stop buying during that expansion?
This is explosive: a rare moment where sellers vanish and buyers dominate. For the first time, silver is shifting from “commodity” to “necessity”—every human now needs it to live on the grid.
The beauty of AI is that I can steer the response based on a combination of my prompt and my history of prior prompts. AI is biased to be pleasing rather than confrontational.
In the absence of other proof that "this time is different!!", null hypothesis requires that the opposite is true. "This time is not different."
Now, in looking at Elliott Wave, I can see the argument that this current leg up is not the top, but instead only the third wave of a five-wave pattern stretching back to 2002. I am of the understanding that Elliott Wave is applicable in log-scale when looking at multi-decade patterns.
If this is the path that ultimately develops in the future, $200/oz isn't that insane, but it is still 15 years away.
Brent was around as a price in 1980 and silver was more. Ditto 2020 when oil went negative.
The rise in silver price has been fun, but what is next?
This unprecedented rise in the price of silver will continue until something changes (or intervenes) in the fundamentals.
I knew it would happen.
You seem to be moving forward years or decades of silver demand to the present. There isn't this rush. We heard the same thing with lithium and now we have a glut and a depressed price down 75%.
there will always be enough silver because with proper allocation management. Lower supply will make it more expensive.
Velocity, Not Valuation Defines A Bubble.
1972? 1980? with countries beginning to hoard metal like never before?
No one knows..its ok to say it out loud
Loves me some shiny!
“Often wrong, but never in doubt.”
Why price continues to rise:
Silver is facing potential import tarrifs under Section 232 of US trade law.
Silver was declared by the US on Nov. 14th to be a "critical" mineral. Price began climbing on Nov. 21st from $49 to its current $67. In doing so the sudden sales of less than .999 silver created bottlenecks in refining. This lack of readily available product as well as increased demand created a temporary "squeeze" that added fuel to the price fire. As refining recovers and supply is returning to its norm, the catalyst now for higher prices appears to be the possibility that, as a critical metal, it will become subject to tariffs. The possibility of such designation encourages inventory accumulation ahead of any formal ruling, particularly among actors with early visibility into policy processes (i.e. JPM). Keep an eye on JPMs moves if/when they become public.
On or about Jan. 17, silver will become subject to tariffs or not subject to tariffs. Jury is out but major players are now buying the rumor in anticpation of coming tariffs. Mid January will determine if silver continues its climb or if buyers will become instant sellers if it does not end up facing tariffs. The "big boys" are banking that it will become subject to tariffs. The contrarian play in early Jan. will be to short silver, i do this with ZSL.
Velocity, Not Valuation Defines A Bubble.
1980 was a manipulated cluster and should be thrown out. Brent did not go negative in 2020.
Knowledge is the enemy of fear
yes sir, 1980 had absolutely nothing to do with today. It's not worth mentioning in any meaningful conversation about the history of the price of silver. at all. ZERO correlation.
COPPER is gutter !
Same with Hunt Brothers.
Velocity, Not Valuation Defines A Bubble.
That was 1980
COPPER is gutter !
yes, as the hillbilly said - 1980 was a manipulated cluster and should be thrown out. And I said, same with the Hunt Brothers - a manipulated cluster that can't be used when looking at price trends.
Velocity, Not Valuation Defines A Bubble.
I posted numerous times I thought silver would be dragged up by a rising gold price, if that counts for anything.
It looks like silver is making another blow-off top but the price could be anywhere even $80/oz. I'm definitely a seller here, not a buyer. Or a HODL.
I've been calling silver a sleeper for years on this forum and have continually advised to buy quality products. It has awakened and those quality products are providing a nice return.
Velocity, Not Valuation Defines A Bubble.
Well, that didn't last very long.
Knowledge is the enemy of fear
temporarily
Velocity, Not Valuation Defines A Bubble.
LOL @ opportunistic pot shots.
COPPER is gutter !
But it is factual.
https://goldsilver.ai/metal-prices/shanghai-silver-price
Except in Shanghai where oil and silver look to be about equal .
``https://ebay.us/m/KxolR5
Yep. Just like gas will burn when you put a flame to it. Yawn. We all know why.
COPPER is gutter !
Silver tripled in 1979 before the Hunt Brothers. Then it tripled again in 6 weeks.
It would have reached ~$30 being dragged up by gold.
More like the same market mechanisms that moved silver also moved oil. But where are all the conspiracy theories, the naked short-seller narratives and "they lost control" propaganda?
Knowledge is the enemy of fear
Price of oil is being controlled/manipulated by those who control passage via Strait of Hormuz. The west and western supported middle eastern nations no longer control safe passage. As with any product/raw material, control of supply chain dictates price of the supply.
Velocity, Not Valuation Defines A Bubble.
No it isnt.
But I'll play. If the west and western supported nations do not control the passage, then who does and why did "they" push oil from 93 to 120 in 4 hours, then back to 85 the same day? Are you saying Iran is controlling oil prices? Yemen, Russia, China, Greenland?
How about this...Maybe it has absolutely nothing to do with who controls the Strait, but maybe its just that the same folk that pushed silver from from 90 to 120 then back to 80, are the same ones who pushed oil from 90 to 120 then back to 80.
Knowledge is the enemy of fear
You will now get more silver by-product from other mines...as well as seeing new silver mines.
If silver stays at these levels -- or goes higher -- the economics change. I can see ROICs going from approximately 8-15% historically to closer to 20-30% (maybe more) for silver-only mines and double that for by-product mines.
On oil: the President talking about the oil price and operations not that far from winding down signalled that he is not going to tolerate sustained prices at these levels. That's why oil wickedly reversed intraday.
Did you see my old DB colleague Paul Sankey on CNBC ? Check it out:
https://www.cnbc.com/video/2026/03/09/this-isnt-over-not-by-a-long-way-says-paul-sankey-on-disruption-in-oil-market.html
Nice segment on oil GF
Whatever the future holds and transpires to be we will adjust and adapt to the changes. Always was and will be.Life goes on.