Today we live in a world where the price of gold continues to hit new highs while the price of silver can’t get over $35 an ounce.
Here is the ten-year chart with gold (in gold) and silver in black.
Despite the epic run in gold, silver can’t seem to get a bid. This type of scenario has happened before. Let me tell you about it…
Kingpin of Precious Metals
In the high-octane world of Wall Street, Gregg Smith was a kingpin of the precious metals market, orchestrating an audacious scheme from JP Morgan Chase’s trading desk. From 2008 to 2016, Smith, a seasoned trader, masterminded thousands of spoofing maneuvers in silver and gold futures: flooding the COMEX with fake sell orders to crash prices, only to cancel them milliseconds later.
His tactics, executed with algorithmic precision, netted JPMorgan over $300 million in illicit profits while manipulating silver prices and screwing over small investors. I know because I was one of them.
Chat logs revealed Smith’s swagger, boasting of “smashing” silver to “scare the algos,” treating the market like a personal playground. His actions kept silver prices suppressed while gold surged.
Smith had his comeuppance when the CFTC and Justice Department, armed with cutting-edge data analytics, shut him down.
By 2018, whistleblower confessions and damning evidence—order cancellations timed to the millisecond—exposed the desk as a “criminal enterprise.” Smith’s world collapsed in 2020 when JPMorgan paid a record $920 million fine, admitting to wire fraud.
In 2023, Smith was sentenced to two years in prison, a rare conviction for a Wall Street trader. Many of us trading silver during its massive run to $51 back in 2009 thought something was up – the prices just weren’t acting the way they should.
Reading about it years later gave us picture of manipulation, though one has to wonder if the same type of thing is happening again.
Smith’s story is a stark reminder of the forces shaping silver’s price, but it also underscores the metal’s untapped potential. Despite past suppression, silver’s fundamentals are stronger than ever, driven by industrial demand, supply constraints, and macroeconomic tailwinds.
Five years from now, we will get the news that some financial power is holding down the price of silver. But like a spring under tension, it won’t stay down forever. And when it jumps it will come fast and hard.
Five Reasons Silver Is Bullish in 2025
1. Soaring Industrial Demand
Silver’s role as an industrial metal is a primary driver of its bullish outlook. Its unmatched electrical and thermal conductivity makes it critical for solar panels, electric vehicles (EVs), and 5G infrastructure. In 2024, solar energy consumed 15% of global silver supply, and with the International Energy Agency projecting a tripling of solar capacity by 2030, demand is set to surge. EV production, expected to hit 20 million units annually by 2025, further boosts silver use in batteries and wiring. Emerging technologies like AI data centers and IoT devices add to the pressure, with industrial demand projected to grow 5-7% annually. Unlike gold, silver’s industrial backbone ties it to unstoppable global trends, ensuring sustained offtake.
2. Persistent Supply Deficits
Silver supply is increasingly strained, creating a structural bullish case. Global mine production, around 800 million ounces in 2024, fell 1% year-over-year, per the Silver Institute, as declining ore grades and reduced base metal mining (silver’s primary byproduct) limit output. Recycling, contributing 180 million ounces annually, can’t bridge the gap. The market faced a 182-million-ounce deficit in 2024, the fourth consecutive year of shortfall, depleting above-ground stocks to decade lows. With new mine development lagging due to long lead times and environmental hurdles, persistent deficits signal tighter markets and higher prices ahead.
3. Inflation and Safe-Haven Appeal
Macroeconomic conditions favor silver as a hedge against inflation and currency debasement. With global debt-to-GDP ratios exceeding 120%, investors are turning to precious metals. Silver, historically a store of value, thrives in inflationary cycles, as seen in the 1970s when prices surged over 1,000%. Its lower price point compared to gold makes it accessible to retail investors, often amplifying gains during rallies. As central banks maintain loose policies and geopolitical risks—U.S.-China tensions, Middle East conflicts—persist, silver’s safe-haven demand is poised to grow.
4. Undervaluation Relative to Gold
Silver’s price is undervalued relative to gold, offering significant upside. The gold-silver ratio, averaging 60:1 historically, stands at 104:1 since gold’s climb to $3,500 per ounce. This disconnect suggests silver, at ~$33 per ounce, should be at $58.33 today. If the price of gold goes higher and the gold to silver ratio overshoots its average of 60 – as it does during catchup moves, you could see silver at much higher levels.
5. Rising Investment Demand
Investment demand for silver is surging, driven by retail and institutional interest. Exchange-traded products like iShares Silver Trust (SLV) reported inflows, reflecting institutional confidence. Technical indicators support the bullish case. The fifty year cup and handle formation puts a price target on silver in at $86/oz. Silver miners which are naturally leveraged will do even better.
Of course I saw the move in silver coming and got American Stock Investor readers in early.. I recommended three silver miners back in October 2024. They are up 106%, 215% and 126%.
ASI Called another Winner
Also, while I’m blowing my own horn, check this out. Back in January I recommended a Polish ETF (EPOL) based on growth, value, a big dividend and my own brand of contrarian investing.
The U.S. market is down 14% and the Polish ETF I recommended is the best in the world, up 28.9%.
If you are tired of losing money and want some winners for a change join us here.
All the best,
Christian DeHaemer
Outsider Club
