Just a few weeks ago, silver naysayers told us we’d have to wait months, or even years, before the market made a big move. Now they are eating their words!

The white-hot metal surged past $18.50/oz this morning to reach its highest level in more than two years.

Silver is up more than 13% in the month of August alone, a time when many precious metals analysts had expected summer doldrums. Even some long-term silver bulls became short-term bears. 

The widespread pessimism toward silver is totally understandable given its performance characteristics over the past few years. 

Like clockwork, rallies would stall out at resistance levels. Banks and other commercial traders playing the short side of the futures markets would always overpower the longs.
So when open interest on silver contracts on the COMEX rose significantly last month, it seemed that big institutional short sellers were set up to smash prices back down once again.

That’s certainly what long-term silver bull Craig Hemke of TF Metals Report expected.  “JP Morgan and Citi [are] making sure there’s no breakout,” he said on the July 19th Money Metals podcast.  “You've got to figure that trend is probably going to continue.” 

Hemke didn’t think silver would get above the “tremendous amount of bank created and technical resistance” at the $17 level. “That's why I think gold continues higher and silver continues mostly sideways maybe for another six to eight months,” he concluded.

Oops!

In fairness, nobody gets short-term to intermediate-term forecasts right 100% of the time. Our friend Craig Hemke has gotten a heck of a lot of things right over the years – and he most certainly wasn’t urging long-term investors to bail out of their positions. 

I fully believe that what we're seeing in gold, silver, and the mining shares is the beginning of what may evolve into the greatest metals' bull market in which you and I have ever participated. 
In the early 2000's, I stated my belief that, before the public-mania phase had been completed a number of years hence, we would see silver prices over $150 an ounce. 

This may sound hard to believe. 

The reality is this: Trying to trade precious metals market day to day or week to week is almost always a mistake. The trends that really matter occur over periods of months to years.

If you missed the opportunity to buy silver while it was still on the ground floor because you worried prices might sink into the basement, there are a couple good reasons not to fret. 

First, silver under $20/oz. is still an amazing bargain. It could double in price and still sit well below its all-time high of over $49/oz. Silver remains cheap versus stocks, bonds, and even gold. 
Second, the silver market may finally be due for a pause, if not a pullback. The weekly RSI momentum gauge is in extremely overextended territory, above 70, for the first time since 2016.

Silver

That doesn’t necessarily imply a heavy and prolonged pullback will follow like the one that occurred from 2016-2018. Having recently broken out from that consolidation phase and now exhibiting bull market characteristics, silver’s pullbacks are more likely to be sharp and short-lived.

The next upleg in silver will probably coincide with a major trend change in the gold:silver ratio. That ratio hit a quarter-century high above 92:1 earlier this year but has retreated dramatically in favor of silver in recent weeks, today under 83:1.

Gold

The ratio seems to trend around its 200-day moving average (the blue line in the chart), which has been pointing up in favor of gold since April 2017.

With the ratio today now having fallen well below the trend line, a confirmed reversal of the major trend in the gold:silver ratio could portend big things ahead for silver prices.

Silver, being the more volatile of the two precious metals, usually outperforms during bull markets. 

The naysayers harped on the fact that gold was outperforming through the first half of the year while some of the more virulent anti-silver bugs reiterated their misbegotten belief that silver isn’t money and won’t provide investors any safe-haven from trade wars or recession fears.

It’s true that silver’s biggest demand component is industrial. But in recent weeks the poor man’s gold has completely untethered from copper and other industrial metals that have continued to sink. 

Unlike ordinary base metals, silver can move dramatically based on the wild card of physical demand from investors.

Not surprisingly, silver coin sales sank during the 2016-2018 basing out period that left some silver bugs feeling worn out and cynical about the prospects of prices breaking through ceilings in rigged futures markets. 

As the legendary Sir John Templeton once said, “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”

Fortunately for silver bulls, we’re a long way from euphoria.
 

 

Money Metals Exchange and its staff do not act as personal investment advisors for any specific individual. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. Readers and customers should be aware that, although our track record is excellent, investment markets have inherent risks and there can be no guarantee of future profits. Likewise, our past performance does not assure the same future. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing through Money Metals, you understand our company not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. This Website is provided “as is,” and Money Metals disclaims all warranties (express or implied) and any and all responsibility or liability for the accuracy, legality, reliability, or availability of any content on the Website.

Recommended Content


Recommended Content

Editors’ Picks

Gold sits at record highs above $3,000 on escalating geopolitical tensions

Gold sits at record highs above $3,000 on escalating geopolitical tensions

Gold price is sitting at record highs beyond $3,000 early Tuesday on intensifying geopolitical Middle East tensions. Israel resumes military operations against Hamas in Gaza after the group rejected US proposals for extending ceasefire. Further US-Iran tensions add to the latest leg up in the safe-haven Gold. 

Gold News
EUR/USD drops to test 1.0900 ahead of German vote on spending plans

EUR/USD drops to test 1.0900 ahead of German vote on spending plans

EUR/USD tunrs loswer ro near 1.0900 in early Europe on Tuesday. Escalating Middle East tensions and EU-US tariff war lift the US Dollar and weigh on the pair. Meanwhile, Euro buyers stay defensive ahead of the German vote on the fiscal spending plans. 

EUR/USD News
GBP/USD falls toward 1.2950 as US Dollar rebounds on cautious markets

GBP/USD falls toward 1.2950 as US Dollar rebounds on cautious markets

GBP/USD falls back toward 1.2950 in the early European trading hours on Tuesday. The pair faces headwinds from a renewed US Dollar uptick as investors run for cover amid intensifying trade and geopolitical jitters. The focus stays on mid-tier US data and Middle East tensions. 

GBP/USD News
Ethereum consolidates below $2,000 as Standard Chartered alters its prediction for 2025

Ethereum consolidates below $2,000 as Standard Chartered alters its prediction for 2025

Ethereum remained just below $2,000 in the Asian session on Tuesday as Standard Chartered's Global Head of Digital Assets Research, Geoffrey Kendrick, updated the bank's 2025 price forecast for ETH. 

Read more
Five Fundamentals for the week: Fed leads central bank parade as uncertainty remains extreme

Five Fundamentals for the week: Fed leads central bank parade as uncertainty remains extreme Premium

Central bank bonanza – perhaps its is not as exciting as comments from the White House, but central banks still have sway. They have a chance to share insights about the impact of tariffs, especially when they come from the world's most powerful central bank, the Fed.  

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025