Silver price discussion and analysis

[greggles]

Worth reading for those interested in silver:

The Sell-Off In Gold & Silver Is Strictly In The Paper Markets​

Comex futures and ETFs​

Dave Kranzler
Apr 05, 2025


I get irritated when I see social media and Wall St “experts,” along with the MSM, refer to price plunges in the precious metals sector - like that which as occurred over yesterday (April 3rd) and today (April 4th) - as if actual gold and silver are being dumped by investors. A colleague sent me today’s market commentary from one of the Wall St banks: “the safe-haven metals are seeing more profit-taking pressure and weak long liquidation.”

Let’s be clear about this: no large holder is dumping physical gold and silver bars. The sell-off is the product of managed money - hedge funds, CTAs and other institutional pools of capital - puking their egregiously big long positions in Comex futures while the banks sit back and ring the cash register as they cover their egregiously large short positions. In a market environment like the last two days, hedge funds dump everything they are long to avoid big margin calls while CTAs unload longs into the downward momentum and go short.

If anything, the price-slam triggered in the futures market will likely stimulate an enormous amount of buying from the east, particularly the Indians who tend to step aside when the price is running higher like it has since mid-March. But they soon will return to the trough and start feeding hungrily on the lower prices.

I don’t know when this plunge in prices will subside. In part it will depend on when the stock market sell-off subsides, which may not happen for a while. On the other hand, I believe that what is developing in the markets is similar to 2008. Without question a credit crisis is unfolding, though it’s been covered-up by the Fed, which has been pumping M2 up to the previous all-time high since the beginning of 2024. With the “strong economy” narrative in effect, the Fed/Treasury needs a cover-story in order to fire up the printing press to prevent the balance sheets of the big banks from melting down. A severe sell-off in the stock market was the recipe in 2008 and 2020.

If this unfolds similar to 2008, at some point the precious metals sector will diverge positively from the stock market:



The chart above shows gold vs the SPX from 2007 to 2010. As the stock market started its final leg lower in late October 2008, the precious metals sector began to diverge positively. This divergence lasted until March 2009, when the stock market began to recover. The mining stocks outperformed everything. GDX more than doubled between October 2008 and year-end.

I don’t know how this plays out short term but the precious metals sector is getting technically oversold, particularly silver which plunged below its 200 dma today. I’m guessing there’s some more short-term pain ahead. But, at some point, the big physical buyers will begin buying physical gold and silver with a vengeance, which in turn will push the prices of gold and silver higher, followed by the miners.

 

[mullokintyre]

Worth reading for those interested in silver:

Its always been in the paper markets, and unless there is a fundamental change, will continue to do so.
The paper players like Goldman Sachs, JP Morgan et al have been allowed to get away with dictating the price using financial derivatives for the past 20 years.
What or who is going to stop them?
Mick

 

[ducati916]

In 2025, the short tenor silver lease rate in London surged from near 0% to 6.5% , initially dropped to 3% after the Trump tariff announcement and is now starting to climb again. On April 10, 2025 the 1-month London silver lease rate stood at 3.8% according to Rob Gottlieb.

The shortage of silver can also be seen in silver’s price structure on the CME COMEX where the silver cash price is surging higher past the active month (May) traded futures price.

When the cash price surges higher than the futures price, this is termed ‘backwardation’ and is a signal that market participants increasingly want physical metal NOW and are willing to pay for it as opposed to waiting a few weeks.

In a word, shortage.

So much for the rush for silver delivery in 2025 being driven purely by fear that Trump would tariff silver bars delivered from London.

​

Figure 1 - Cash Silver Price Minus 2nd Futures Price (Currently May 2025); Source: GoldChartsRUs.com

The market shortage of silver can also be seen in Figure 2 below in the snap-back in the cash silver price from the initial silver tariff exclusion panic sell-off down to $28 /oz. to now back above $32 /oz. over the past 6 trading days.

​

Figure 2 - Cash Silver Price Bounce Back To $32 /oz.; Source: TradingView.com

We have signals from both the London and New York silver markets that there is an increasing shortage of physical silver available for delivery.

jog on
duc

 

[ducati916]

Warren Buffett, the Oracle of Omaha, is facing a peculiar problem these days: he has too much cash.

Berkshire Hathaway is sitting on an eye-watering $325 billion in dry powder, a record high. Historically, Buffett has always been eager to deploy capital when the odds are in his favor. But today, even he admits he’s struggling to find value in this overvalued market.
Which leads to a fascinating question: could Buffett turn to silver, or even silver miners, as a way to put that cash to work?
To answer that, let’s take a short trip back to the late 1990s when Buffett made one of his more unconventional moves.

Buffett’s Big Silver Bet in the 1990s​

In 1997 and 1998, through Berkshire Hathaway’s General Re subsidiary, Buffett bought about 130 million ounces of physical silver. That’s roughly 20% of the world’s known above-ground supply at the time.

His rationale was Classic Buffett: supply and demand.

Silver had been beaten down for years, with central banks selling their reserves and industrial demand remaining relatively stable. Buffett saw the price, around $4.40 per ounce, as disconnected from the underlying fundamentals.

Buffett’s mentor Benjamin Graham once told him, “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”

He figured silver’s actual value would eventually be “weighed” and the price would rise accordingly.

Of course, Buffett was right. Silver prices did move higher, peaking around $7 per ounce in the late 90s. Depending on the price Buffett closed the trade, he made anywhere from $208 million to $328 million.

However, the trade attracted regulatory scrutiny. The CFTC investigated whether Buffett had cornered the market. While they found no wrongdoing, the experience likely left Buffett with a bad taste in his mouth.

How 1998 Relates to 2025​

Today, silver finds itself in a similar situation.

Industrial demand for silver is surging, especially for solar panels, electric vehicles, and advanced electronics. Yet mine supply is struggling to keep up. Add in a general underinvestment in new mining projects, and you’ve got a classic supply-demand imbalance brewing.

Meanwhile, institutional ownership of silver remains very low. Hedge funds, pension funds, and endowments aren’t piling into silver the way they are with equities or even gold.

In short, the fundamentals look tight, and the market doesn’t fully reflect that yet, just like in the late 1990s.



Silver, from January 1997 to March 1998; Credit: StockCharts.com

In the late 90s, silver was trapped in a narrow band before Buffett’s buying helped nudge it higher. Today, silver has been rangebound, first between $20.50 and $25.50, and second from $27.50 to $34.50. This is despite booming demand and constrained supply.


It’s not history repeating, but it’s history rhyming.

Why Buffett Probably Won’t Buy Silver Miners​

As tempting as the setup is, there are a few big reasons why Buffett likely won’t be backing up the truck into silver miners.

First, Buffett loves businesses with durable competitive advantages, or “moats,” predictable earnings, and strong management. Mining is a tricky business — costs fluctuate wildly, mines get depleted, and governments change royalty schemes overnight. All of that makes mining an unpredictable venture, something Buffett typically shuns.

Second, Buffett experienced the impact of commodity price swings firsthand with silver in the 1990s and again with oil, when he invested heavily in ConocoPhillips just before the 2008 crash. Those experiences taught him that commodities are hard to predict and even harder to control.

Third, Buffett is 94 years old. He’s thinking more than ever about Berkshire’s legacy and stability. A big, volatile bet on miners just doesn’t fit that narrative.

What About Buffett’s Lieutenants?​

However, it’s worth noting that Todd Combs and Ted Weschler, the two managers Buffett handpicked to steer Berkshire’s massive investment portfolio, have more flexibility.

They each control approximately $20 billion in assets and have demonstrated a willingness to venture into tech, fintech, and other sectors Buffett has traditionally avoided.

Could they see an asymmetric bet in silver miners? Absolutely.
Especially if they view it not as a commodity play, but as a long-term investment in critical metals needed for the alleged green transition.
Companies like Wheaton Precious Metals or Franco-Nevada, which operate on a royalty and streaming model rather than directly mining, might be more appealing. These businesses generate predictable cash flows without the operational headaches of digging metal out of the ground.

Wrap Up​

While the silver setup today echoes the opportunity Buffett spotted in the late 1990s, it’s unlikely that we’ll see Berkshire Hathaway dive into silver miners in a meaningful way.

Buffett himself might pass. The “official” chances? I’d peg it at less than 5%.

But don’t count out Berkshire’s next generation. In a world where tangible assets are becoming more valuable — and where silver’s importance to technology and energy is only growing — a small, strategic allocation to royalty-based silver plays could quietly find its way into the Berkshire portfolio.

For now, Buffett will likely continue to do what he’s always done best: wait patiently for the perfect pitch.
Because, as he once said, “The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot.”

And if silver miners aren’t quite there yet, rest assured, Buffett is still watching… and waiting.


jog on
duc