Silver is Surging—But Can it Go Even Higher?

I told people to buy at $28… now it’s worth $100+

At some point—well, really several points—I wrote that silver was going to surprise investors by crossing triple digits.

I now humbly present this chart… (Accurate as of the time of writing).

Silver—sweet, misunderstood, underappreciated silver—has finally crossed into triple-digit territory. That “impossible” milestone that pundits said would never happen?

Folks who followed my advice in Global Intelligence Letter and snapped up silver in the $28 range are probably not reading today’s dispatch. Some are out picking a color for their new Range Rover, and others are on a Greek island trying to decide between the moussaka and the octopus for lunch (always the moussaka).

Sure, I joke.

But just barely.

Silver is having an epic run, which I said was coming back in the June 2021 issue of Global Intel. As I wrote then: Silver is “an industrial metal used in electric vehicles, solar panels, and 5G telecom. So, silver is right in the wheelhouse of some of the hottest industries on the planet these days.” Equally importantly, I added that the “spike in demand for silver is running headlong into falling supply [and that] when rising demand meets falling supply, prices move in one direction: up.”

I refer you back to the above chart…

Now to my broader point for today’s dispatch: The silver jubilee is not over.

I have read way too many tweets on Twitter/X, and read far too many comments in the media insisting that silver has had its day in the sun and that a great downside awaits.

I will disagree, though I’ve not decided on whether mine is a respectful or disrespectful disagreement.

Monetarily speaking, however, silver is nowhere near its highs relative to the amount of money the Federal Reserve has created.

The Fed’s money creation is a form of inflation in that all those trillions of extra dollars the Fed conjures out of the ether devalue every existing dollar. It helps explain why the value of a dollar from the year 2000 now buys just $0.53 worth of goods.

Going back to January 1980, when silver hit an unimaginable peak of just over $49 per ounce as the Hunt brothers tried (unsuccessfully) to corner the market, the dollar has lost nearly 75% of its purchasing power.

Meaning that silver today, on an inflation-adjusted basis, needs to touch $204 to equal its 1980 high.

Of course, that’s reading the tea leaves in hindsight… a bit of a lazy way to gauge where an asset price might be headed.

I prefer to consider the current environment that’s impacting the asset’s price.

The Brothers Hunt certainly had their impact on silver’s price as they tried to gobble up as much of the metal as they could, but they were not acting based on some tarot card reading. They aimed to exploit fundamentals that were then shaping the silver market. Namely:

• Raging inflation and a monetary crisis in America. The late 70s saw rampant inflation, often in double digits, which eroded trust in the US dollar.
• Geopolitical instability: The 1979 Iranian Revolution was unfolding, as was the  Iran-Iraq War, both of which caused global panic, driving investors toward safe-haven assets like gold and silver.
• “Poor Man’s Gold” mentality: As gold prices soared (hitting $850 in 1980), silver was seen as a cheaper alternative and a hedge against the failing dollar, leading to the public stampeding into the silver market.
• Fundamental supply/demand imbalance: Silver production was limited, and as investment demand skyrocketed, physical supply became extremely scarce, independent of the Hunt brothers’ hoarding.

Change a few words, and those exact same bullet points are at play today.

• Inflation and a monetary crisis in America. While inflation isn’t raging today, it was just a few years ago and it remains well above trend. That, and America’s egregious debt, are eroding trust in the US dollar.
• Geopolitical instability: Invading Venezuela, maybe invading Greenland and destroying NATO, revolution in Iran again, Russia/Ukraine still at it. Like that ’70s show, investors are again diving into safe-haven assets such as gold and silver.
• “Poor Man’s Gold” mentality: Gold prices have soared to new record highs above $5,500 per ounce (at the time of writing), and silver is again seen as the cheaper hedge against the failing dollar, leading the public to stampede into the silver market to such a degree that the US Mint has suspended sales of various silver coins because it cannot meet demand.
• Fundamental supply/demand imbalance: Silver production (supply) remains limited, a function almost entirely of gold, copper, and zinc mining. As well, China, the world’s second-largest silver miner, has shut down exports of silver, affecting roughly 70% of the global supply of refined silver. Industrial demand, meanwhile, is surging amid the AI/solar/EV car boom. So now, physical supply has become extremely scarce.

It’s almost like déjà vu all over again.

Which is why I say silver prices are going higher still.

How high?

Who knows?

Euphoric peaks can take asset prices to levels few imagined.

I’m on record saying that silver sees at least $150, though that could easily be $300.

And frankly, depending on what happens with Greenland, with the mid-term elections, with Iran, with Russia/Ukraine, with mining, supply/demand, and with China… silver could soar deep into the hundreds. I’ve seen predictions above $1,000 per ounce. I’m certainly not predicting that, but neither will I say it’s impossible.

We are in a moment fraught with social, geopolitical, financial, and monetary risks. All are powder kegs. One errant spark and silver prices blow sky high.

I won’t tell you to rush out and snap up ounces of silver. Prices are high and supply is rare.

But you might consider owning some silver mining stocks. If silver prices do what I suspect they’ll do, silver mining executives are going to have a helluva good time counting all their profits this year… which means silver mining stockholders are going to party like it’s 1979.