by Adam Sharp, Daily Reckoning:
Silver is trading at $47.98 per ounce as I write this.
The all-time intraday high here in the U.S. was $50.36 way back in January of 1980. That was the peak on New York’s COMEX (commodity exchange).
However, silver has never closed a trading day above $50. And that’s the official measure of an all-time high.
Once silver briefly surpassed $50 in 1980, New York’s COMEX essentially killed the momentum. COMEX executives decided that since the Hunt brothers were cornering the market, they would restrict trading to sell orders only.
TRUTH LIVES on at https://sgtreport.tv/
And they jacked up margin (loan) costs for speculators, causing a cascade of selling. We covered this in detail in The Untold Story Behind Silver’s 30x Move (recommended reading).
In 2011, we got near $50 again, hitting $49.82. COMEX once again decided to increase silver margin requirements, making it more expensive for traders to maintain long positions.
Fast forward to today, and we’ve come a long way in a short time. Silver is up nicely from $29.14 at the beginning of this year.
This is fairly typical for silver bull markets. Moves can be abrupt, almost violent.
Some traders on X (formerly Twitter) are speculating that silver will once again fail to close above $50 during this bull cycle.
And in the near-term, we are due for a pullback. And it’s possible that COMEX will try to hold back the breakout with another hike of margin requirements.
But today I will explain why silver is set to smash through that $50 wall like the Kool-Aid Man.
A Different World
Compared to both previous silver runs to near $50, this one is a different animal.
First of all, silver is far more scarce. In the chart below, from last year’s Silver: So Much Bigger Than 2011, I showed the annual silver surplus or deficit from 2010-2023. This is simply the difference between annual silver demand and supply.
Source: Silver Institute
As you can see, today’s silver deficits are huge compared to 2011, which barely reached 50 million ounces. Recent deficits have consistently been over 100 million ounces, and reached a stunning ~250 million ounces in 2022.
In 2024 the deficit was around 150 million ounces. And I expect 2025 to be another big deficit year. Stockpiles are dwindling as demand soars.
During the 1970s silver bull market, annual silver deficits peaked around 60 million ounces.
The best silver deposits have already been mined, and almost all silver today is produced as a byproduct of mining other metals.
Read More @ DailyReckoning.com
