If you’re a long-time silver investor, congratulations on having the reward finally match the effort.
Sometimes what’s happening now reminds me of the 2004 Red Sox, where for those who are not familiar, the Red Sox used to be known as the lovable losers, and had basically been getting their asses kicked for the better part of the previous 100 years.
Then in 2003 they suffered an absolutely devastating loss to their arch-rival Yankees, and I remember thinking back then, ‘well, even if they did finally win, how much would it actually mean if you got it on the 100th try?’ It almost felt like after so much heartbreak, even if they finally won at some point, how could you not end up feeling like, ‘well, they sure had enough chances to finally get it right eventually.’
But then when they became the first team in baseball history to come back from being down 3-0 in a playoff series in 2004 to beat the Yankees and go on to win their first World Series in 86 years, it was almost as if it happened in the only way that could have done justice to all of the prior history. And to see silver up another $3.50 today just continues to leave me with that same feeling.
So far it doesn’t seem like the markets are sold on the Federal Reserve’s latest ‘not QE’ QE package. And for more insight on the Fed’s latest meeting and press conference yesterday, where the current board members forecasted that there will be only one 25 basis point rate cut in 2026, despite how leading Fed chair candidate Kevin Hassett is already talking about how he has no problem with cutting rates at more than 25 basis points at a time, I think you would find this 7-minute audio from Vince Lanci worth hearing.
We’ll leave aside for now the whole unresolved silver supply situation in London and China, although I will mention that the lease rates are surging again, which is perhaps the most concrete indication that the silver squeeze is not over yet.
I’ll also pass the following note along, with the caveat that I cannot confirm whether this is accurate or not. But perhaps let’s call it something to keep an eye on, and certainly an interesting development if there is truth behind it. And for what it’s worth, I don’t know Dario personally, although he generally seems like he knows his markets.
In terms of a longer-term perspective on the silver supply, here’s an excerpt from an article I found recently that talks about how the gold to silver mining ratio continues to be far lower than the gold to silver price ratio, and how while there is still plenty of silver in the earth’s crust, most of the easy-to-mine deposits have already been mined.
The aforementioned geological gold-silver ratio of 17 is therefore far from stable. It rather characterizes the situation in the uppermost layers of the Earth’s crust and decreases the deeper one goes. For earlier generations, this was a great advantage; for us, it is a disadvantage, as we have to dig deeper to access similarly large quantities of silver.
Technically, this is certainly easier for us than it was in earlier times. Nevertheless, the disadvantage remains that, compared to previous generations, we must expend significantly more effort to extract similar amounts of silver. If one also considers that the low-hanging fruit has already been harvested almost everywhere in mining, it quickly becomes clear what avalanche of costs is already heading our way.
We talked about this, the latest move in the silver market, and also some of the recent M&A in the sector in a call on our YouTube channel today, so if you’d like some more coverage of what’s happening, you may enjoy this one too.
We’ll see where the silver price ends. Will the futures be up over $4 this time?
Either way, it sure is fun to be a silver investor when it feels like the price is going up $2-$3 every day. I assume there will eventually be another day when the price will go down again, but just like recently, hopefully you’re enjoying the rally with another big smile on your face.
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