The structural conditions that enable squeezes—relatively small market size, dual industrial/investment demand, and paper market leverage—persist in ifc markets review modern silver markets. Asset managers typically reassess portfolio allocations during silver squeezes. The squeeze intensity can be measured through the spread between spot prices and physical delivery prices.
This would likely cause the price of paper silver products to collapse, while physical silver prices could skyrocket to jaw-dropping levels, potentially reaching several hundred dollars per ounce. In a silver short squeeze, a significant rise in the price of silver forces traders who bet that the asset would depreciate to either sell their shorts or cover their bets by buying stocks of the asset they’re shorting. In essence, this process “squeezes” bearish silver investors out of the market and can lead to a cycle of higher asset prices. Short squeezes can happen outside of the precious metals sector, too.
Wall Street goes full bull with tariffs and payrolls looming, Main Street stays tentative as gold prices push $3,100
For those interested in participating in the silver markets, considering a beginner’s guide to investing in mining stocks provides additional avenues beyond physical metal purchases. Furthermore, following communities like the Reddit Silver Squeeze forum can provide insights into the grassroots movement supporting higher silver prices. For more information about the potential market transformation, the Silver Squeeze 2025 analysis offers valuable perspectives.
He sees promise in gold and silver, as well as Bitcoin and the artificial intelligence sector. This week has brought ups and downs for the gold price as US President Donald Trump’s tariff decisions continue to create widespread uncertainty across sectors globally. Check out our expert market commentary playlist, which features interviews with key figures in the resource space. If there’s someone you’d like to see us interview, please send an email to This time around, the push seems to have originated on X, formerly Twitter, where it’s quickly gained traction among key players in the silver community.
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You’d have a whole crowd of people gathering up nickels, dimes and quarters. It gets to the point where maybe there’s a few left in the weeds in the ditch, which is a little swampy with a concise guide to macroeconomics dirty water. And when they are met with responses that include significant delays on their delivery times, they are naturally a bit upset. So you start your article, Keith, by invoking the eighth grade sniff test, as it were.
However, even a quick 11% increase in the price of silver during WallStreetBets’ 2021 short squeeze attempt was insufficient to trigger a genuine short squeeze. At least for now, silver price action is far too muted for anyone to convincingly call it a short squeeze. On this page, we’re taking a closer look at the concept of a silver short squeeze and answering some of your questions about how it may (or may not) apply to the current silver market. J.P. Morgan Chase is one of the largest traders of precious metals, so the Reddit user mentioned taking on the banking giant. The person also noted silver stocks available to retail investors—First Majestic Silver Corp and the iShares Silver Trust ETF. While remaining somewhat decentralized, Silver Squeeze 2.0 has emerged through a network of influential precious metals commentators, alternative financial analysts, and retail investor communities on X.
How Are Tariffs Affecting Silver and Other Metals?
- Since 2003, SilverSeek.com has served millions of readers with the latest silver news and information.
- Technical analysts suggest that sustained trading above $30 could accelerate momentum toward the $35-40 range, potentially setting the stage for a challenge of previous records.
- Resolution patterns vary based on squeeze duration and participant behavior.
- The risk of an explosive silver short squeeze is further amplified by the astonishing ratio of 408 ounces of “paper” silver—ETFs, futures, and other derivatives—for every single ounce of physical silver.
- In 2023, the deficit reached 184.3 million ounces, with an even larger shortfall of 215.3 million troy ounces projected for 2024.
- This cautious approach has created a unique environment where precious metals are performing well despite relatively high real interest rates.
Rising silver prices improve profitability metrics and can make previously marginal mining projects economically viable, potentially accelerating development timelines for new production. Investors interested in this sector might consider reviewing a comprehensive mining stocks guide to understand these dynamics. A silver squeeze develops when physical silver demand rapidly outpaces available supply, causing inventory depletion and price acceleration. Unlike typical market fluctuations that self-correct through normal ascending triangle pattern trading, a squeeze represents a structural imbalance that disrupts the relationship between physical metal availability and paper contract trading. The COMEX markets are overwhelmingly markets for trading paper contracts rather than for delivering physical metals. Over the past month, the daily COMEX trading volume for gold has ranged from 16 million to 34 million ounces.
- As silver continues its upward trajectory, the potential for explosive gains has never been clearer.
- The campaign generated millions of social media impressions and directed unprecedented retail flow into silver markets.
- Another way to assess whether silver is undervalued or overvalued is by comparing it to various money supply measures.
Understanding the Silver Squeeze: Market Dynamics Explained
The critical nature of these applications often means manufacturers must secure supply regardless of price, sometimes through long-term contracts that include price adjustment mechanisms. Physical gold demand has been so strong over the past year that selling short gold futures contracts has become highly risky. This market structure stabilizes prices, making extreme volatility less common. Moreover, silver’s trading occurs across physical markets, futures exchanges, and ETFs, diluting the impact of localized buying pressure. During the 2020 pandemic disruption, physical silver briefly traded at 30-40% premiums to spot prices as supply chains broke down. A true squeeze would see this phenomenon repeat but potentially at much higher spreads.
The Commodity Futures Trading Commission (CFTC) plays a central role in monitoring silver market distortions. During significant squeezes, the CFTC may issue public statements clarifying market conditions or warning against manipulative practices, serving both informational and deterrent functions. Mints and refiners, operating under fixed production capacity, cannot quickly adjust to demand surges. This creates production backlogs that extend delivery times from days to weeks or even months for certain products.
Are We in a Silver Short Squeeze?
This lingering effect often manifests as elevated market sensitivity to similar catalysts following major squeeze events. Market adjustments following the initial squeeze phase often continue for 2-3 months as supply chains normalize and price discovery mechanisms reestablish equilibrium. During this period, premiums gradually decline while delivery times improve, though full normalization may require longer periods. Correlation analysis between silver and other assets helps optimize portfolio construction. During inflationary periods, silver often moves inversely to fixed-income assets, potentially providing counterbalance to bond portfolio losses when interest rates rise in response to inflation concerns.
The London Gold Pool started failing in June 1987 and totally collapsed in May 1971. Recent data shows that solar panel manufacturing alone consumed over 140 million ounces of silver in 2023, with projections showing this could reach 200 million ounces by 2025 as renewable energy deployment accelerates. Thanks again for your analysis and explanation regarding the massive amount of shorts and their upcoming dilemma.
It’s a rapid jump in the price of a stock or other asset that squeezes out the short-sellers from the market, forcing them to buy back the shares. But the catch is that when they are forced to cover their positions, the price is pushed even higher, causing even more short sellers to capitulate. A silver short squeeze requires a confluence of high short interest (20%+ of open interest), supply shocks, and coordinated buying across physical and paper markets. The most notable silver short squeeze in history occurred when the Hunt brothers accumulated over 200 million ounces of silver, driving prices from $6/oz to an all-time high of $49.95 per ounce. This represented a staggering 700% increase during their accumulation phase. Yes, industrial demand is more likely to drive a squeeze than retail investment.
Now, imagine what happens if silver climbs by $5, $10, $20, or more from this point. A short squeeze in the silver market is more likely, as it’s smaller than the gold market (although still much larger than GameStop’s capitalization). This is why Reddit investors chose the silver market as their next place to squeeze the short sellers. They wanted to expose a shortage of supply and to push silver prices up.
Silver’s price action over the past year serves as a textbook example of how silver tamping works. As the chart below illustrates, silver has repeatedly attempted to break above the $32–$33 resistance zone, only to be slammed back down each time—except for the current breakout attempt (the outcome of which remains uncertain). I was looking this morning at Twitter and one particular promoter of these conspiracy theories. You have this thing where he quoted the, I get a little bit ahead of myself, but he quoted the LBMA description of unallocated gold and silver at the bullion banks. It’s a bank credit, nothing more, which is a different thing entirely from unallocated silver, let’s say at the Perth Mint or some other refiner or commercial company in the silver, gold or silver business. Unlike the Hunt brothers’ centralized effort, the 2021 squeeze represented decentralized collective action.
That is, the annualized spread to decarry silver is lower, for farther-out contract months than for near. The basis rises as you go to farther and farther contract months, and the cobasis falls. Janie Simpson, Managing Director of ABC Bullion in Sydney, Australia, also spoke on the record. “ABC Refinery is the largest silver refinery in Australia, refining approximately 85% of the silver refined in Australia and 70% in Australasia.