Is The Silver Bull Finally Here?
With silver classically lagging behind gold during the yellow metal’s stunning recent rise, Peter Schiff believes the long-anticipated bull market for silver is finally here in earnest. And in a bull market, silver tends to outperform gold - once it finally catches up.
But, anyone watching the gold-silver ratio this year can clearly see that a breakout was coming for gold’s closest companion. As May turned to June, the market heated up and silver rocketed upward.
One very interesting aspect of this very recent surge in silver (relative to gold) is that it has coincided with a very heavy period of drawdown for hedge funds as momentum trades have underperformed and most-shorted stocks have soared...
...making us wonder if hedgies are selling gold to fund margin (or was silver just aggressively shorted and this drawdown in stocks is forcing more degrossing - of those shorts)?
The gold-silver ratio, which had stubbornly hovered above 80:1 for much of the past year...
...soared up to a record 105:1 after Liberation Day...
But has since started to collapse back - a clear signal that silver was catching up.
Silver is finally stepping out of gold’s shadow, and the reasons are as fundamental as they are undeniable.
As Schiff continues to explain, silver’s unique dual role as both a monetary metal and an industrial commodity makes it a powerhouse in today’s economy, especially with the never ending obsession with green energy. From solar panels to typical electronics and medical applications, demand has been quietly surging. Last year, industrial silver demand hit a new record when it surpassed 680 million ounces, following three straight previous years of records.
Global silver consumption for solar alone is projected to hit new highs, with 85% of silver paste demand going straight to solar panel production. The newer N-type solar panels, which now dominate the market, are more efficient and stable than P-type panels—and they require more silver to produce, not less.
Meanwhile, mine production is flatlining. The world’s top silver-producing countries, like Mexico and Peru, are struggling with declining ore grades and regulatory headaches. Total global mine output in 2024 barely crept above 800 million ounces, while demand is pushing toward 1.2 billion. You don’t need a PhD in economics to see the squeeze coming.
The U.S. dollar, once the world’s unassailable reserve currency, is losing its grip as BRICS nations push for USD alternatives and central banks hoard gold at record rates. Silver, the more volatile cousin, can benefit disproportionately when trust in paper money collapses. Investors are waking up to the reality that silver, at under $40 an ounce, is still absurdly undervalued compared to gold’s $3,400 price tag. Historically, the gold-silver ratio has averaged closer to 50:1 or lower in bull markets. If that holds, silver could easily reach $50 an ounce before gold moves higher.
And don't forget, you need silver for missiles...
CONTINUED…
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