A Better Silver Squeeze

Core Viewpoint - The current silver market is experiencing a significant bull run driven by industrial demand and individual purchases of physical silver, contrasting with the speculative nature of the 1980 silver bubble driven by futures contracts and leverage [12][14][16]. Historical Context - In 1970, silver was priced at approximately $1.60 per ounce, peaking at $49.45 in 1980, marking a 30x return [1]. - The collapse of monetary demand for silver began in 1965 when countries stopped using it in coinage, leading to a temporary oversupply and depressed prices [2][3]. - The Hunt brothers, wealthy heirs concerned about fiat currency, began accumulating silver in 1970, believing it was undervalued [4][5]. Market Dynamics - By 1979, silver prices surged from around $6 to $25 per ounce, driven by a combination of the Hunt brothers' buying and broader economic factors, including high inflation peaking at 14% [6][8]. - The Hunt brothers acquired approximately 200 million ounces of silver, primarily through futures contracts, which ultimately led to their downfall when the COMEX imposed restrictions in 1980 [9][10]. Current Market Analysis - The current silver bull run is characterized by strong industrial demand and a shift towards physical silver purchases, reducing the risk of a repeat of the 1980 bubble [14][15]. - Silver is trading near all-time highs, with a price target of $125 per ounce by the end of 2026, driven by stagnant mined silver growth and increasing industrial demand [16][17]. - The market is expected to face a significant increase in investment demand, which will be a crucial factor in the supply-demand equation moving forward [17]. Future Outlook - The impending round of money printing by central banks is anticipated to create a favorable environment for silver prices, although short-term pullbacks may occur [18].