I explained this in detail in a recent report, which I highly recommend reading for further insights, as I don’t have space to cover it fully in this already lengthy piece. You’d have a three-dollar positive cobasis and three dollars for the next delivery month. I mean, if that happened, Monetary Metals, I, we would be getting up on the rooftops, jumping up and down, bellowing that there’s a giant 60 percent backwardation and silver, but we wouldn’t be the only ones. Or if you’re a mint, you’re then taking the bars and you’re squashing them under rollers to flatten them and polish them.
- The silver squeeze is caused by investors buying up silver in an attempt to drive up prices and “squeezing” the investors.
- A user in the WallStreetBets forum posted about an attempt to create a short squeeze on silver futures.
- « The labor market is showing signs of stress beyond what the headline unemployment figures suggest, » Booth explains.
- Additionally, silver is extremely undervalued by nearly every measure.
COT Gold, Silver & USDX Report – April 18, 2025
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To understand the silver squeeze, you first need to know the meaning of a short squeeze. Short-sellers borrow shares of stocks that they expect to drop in price. Then they sell the stock and attempt to buy it back at a much lower price. Silver mining equities typically provide leveraged exposure to metal price movements, often amplifying silver’s performance by 2-3 times in both directions. During the 2021 episode, many silver miners saw 20-30% price increases even though spot silver only moved about 15% higher.
Another did not want to say in public that it has 1,000 bars to sell (which it does) Instead, they preferred to pontificate supply and demand theory. Some recent videos about the silver market are all about cryptocurrency mining generating more buzz than we have seen in a while. They make several points, but the main one is that there is a global shortage of silver. This assertion stands in contradiction to the fact that the silver price has dropped. As of the date of the first of these videos, it had dropped around 10% from its level just a month earlier. That is if one price is higher than the other, somebody is going to buy the lower and sell higher.
According to consensus within the precious metals community, the primary culprits behind silver price manipulation are the bullion banks—the most influential players in the precious metals market. These include major financial institutions such as JPMorgan Chase, UBS, HSBC, and Goldman Sachs, several of which have been found guilty of manipulating precious metals markets—particularly gold and silver. Because the price of silver tends to increase slowly over time, it’s unusual for the asset’s value to increase quickly and dramatically enough to trigger a mass sell-off of short positions. And what is nfp unlike traditional stocks, silver doesn’t benefit from quarterly earnings reports, the closure of competing businesses, or other fundamentals that drive short squeezes on Wall Street. In a violent short squeeze, holders of paper silver could be forced to scramble for the extremely scarce physical silver to fulfill their contractual obligations.
Another method bullion banks use to suppress silver prices, aside from flooding the market with massive quantities of paper silver almost daily, is spoofing. This tactic involves placing large sell orders on the futures limit order book to create an artificial price ceiling, reinforcing resistance at key levels. Some of the most aggressive slams tend to occur on Friday mornings during the U.S. trading session.
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- As prices rise, these institutions must evaluate whether to cover positions at a loss or maintain shorts while posting additional margin.
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- While gold reaching $3,000 might a bit far-fetched, it’s actually quite realistic, as it’s just over a 10% increase from today’s price.
Key Catalysts for Silver Price Spikes
This competitive buying creates a feedback loop where rising prices attract more buyers, further straining supply chains. When a silver squeeze occurs, we witness unusual price action, extended delivery times, and increased premiums over spot prices. These events can significantly impact both investors and industries that rely on silver as a raw material. The collapse of the London Gold Pool led to then-President Nixon closing the US Treasury’s gold-exchange window on August 15, 1971. For silver, short positions are often held by institutional traders hedging against price volatility or speculating on macroeconomic trends.
Exchange for Physical (EFP) Mechanism Under Pressure
The prices are very close, but changes in that spread are very meaningful. Spreads tend to be stable unless there’s a change in market condition. Well, if you think about the business of, let’s say, take somebody vertically integrated like the Perth Mint, although I don’t really want to speak specifically to them. And then you’re melting it and you’re dissolving any chemical reactions. And so all of your production processes, there’s a certain amount of gold that’s always there. Technological developments have arguably increased squeeze potential by enabling faster coordination among decentralized participants.
Key Claims by Silver Squeeze Advocates
It’s a fraud, it’s fractional reserve banking and then they’re back off to the races again. Last time, I asked— Which statue appears on two US coins, with neither coin design created by the sculptor who created the statue? The Minute Man is an 1874 sculpture by Daniel Chester French in the Minute Man National Historic Park in Concord, Massachusetts.
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During a short squeeze, investors who were betting that the investment would become less valuable lose money, effectively “squeezing” them out of the position. When these traders limit their losses by buying more of the stock they were previously shorting, the price of the asset increases even more, creating a cyclical pattern that accelerates a stock’s rise in value. The mechanics rely on silver’s relatively small market size and the physical delivery constraints of a commodity that, unlike purely financial assets, must be physically refined, transported, and stored. Short squeezes focus primarily on forcing traders with borrowed positions to repurchase assets at higher prices. Silver squeezes certainly include this element but extend further by creating actual physical supply constraints that impact industrial users and retail markets beyond financial trading.
How Margin Requirement Changes Control Prices
The next condition I outlined was that silver priced in euros must decisively close above the €30 resistance level, which was established at the May peak. I stated that this event would help confirm a close above $32.50, greatly reducing the chances of it being a false breakout. I find it valuable to analyze silver priced in euros, as this approach removes the impact of U.S. dollar fluctuations, offering a clearer view of luno exchange review silver’s intrinsic strength or weakness. Notably, silver priced in euros often respects round numbers like €26, €27, and €28, frequently establishing key support and resistance levels at these points.
Also, take a look at the chart below and notice how gold struggled from 2020 to early 2024 to break above the $2,000–$2,100 resistance zone, which acted as a price ceiling for much of that period. However, in March 2024, it finally broke out, igniting the powerful bull market we see today. I see striking parallels with silver’s $32–$33 resistance zone over the past year and believe that once silver manages to close above this level, it will soar just as gold did. While the supply of dollars has surged and continues to expand, silver has consistently preserved its purchasing power.
PressReader is a digital newsstand with 8,000 newspaper and magazine editions in 60 languages from more than 120 countries. Danielle DiMartino Booth, a former Fed advisor, has predicted 4-5 potential rate cuts might ultimately be necessary in 2025, significantly more than the Fed’s current projections. « The labor market is showing signs of stress beyond what the headline unemployment figures suggest, » Booth explains.