Folks, if you’ve been following my posts on X, or reading the Outsider Club you know I’ve been banging the drum on precious metals for a while now.
My track record speaks for itself—last year, I called the breakout in gold before it smashed through $2,500 an ounce, and my platinum pick surged 35% after I flagged the lease rate spike. I have multiple triple-digit winners in Silver. In fact, I’m having a great year as my total portfolio gain in my investment newsletter, American Stock Investor, is 92%.
Lease Rates
Today, I’m diving into what lease rates are, why they’re a critical signal in the metals markets, and why the current spike in silver lease rates has me pounding the table for silver bulls.
Let’s start with the basics. Lease rates in the metals markets are the cost of borrowing physical precious metals, like gold, silver, or platinum, typically expressed as an annual percentage. Think of it like interest on a loan, but instead of dollars, you’re borrowing ounces of metal.
These rates are set through a market auction process, often involving bullion banks, miners, refiners, and jewelers. When you lease metal, you pay a fee to use it, and at the end of the term, you return the same amount of metal plus the lease rate in metal or cash. It’s a niche but vital part of the precious metals ecosystem, especially for industries like jewelry, electronics, or mining that need physical metal to operate.
Why do lease rates matter? They’re a leading indicator of supply and demand dynamics. When lease rates spike, it signals tight physical supply or surging demand—often both. Miners, refiners, or manufacturers are scrambling for metal, and they’re willing to pay a premium to get it.
This scarcity can foreshadow price increases, as the market catches up to the physical crunch. It’s like a canary in a coal mine for metals investors. When lease rates go haywire, big moves in spot prices and related stocks often follow.
Let’s talk platinum, where I nailed a call just a month ago. As you can see the lease rates started to get expensive in Q1 and then went crazy just a few months ago.
This was a screaming signal that physical platinum was in short supply, driven by industrial demand (think catalytic converters) and a rebound in jewelry sales, especially in China.
Sure enough, platinum prices followed, rallying to over $1400 from $920 an ounce. Miners like Anglo American Platinum and Impala Platinum rode the wave, with stock gains of 25-40% in months. My recommendation, the Platinum ETF (PLTM), is up 30% since I recommended it to ASI readers in May. I personally own this ETF and think it has a long way to run.
Silver
Now, let’s turn to silver. As I write this in July 2025, silver lease rates are spiking again, touching 6.5% annually, levels we haven’t seen since the 2021 silver squeeze.
This isn’t just noise; it’s a signal. Silver’s dual role as an industrial metal (used in solar panels, electronics, and batteries) and a financial safe-haven is driving demand through the roof.
The World Bank noted silver prices hit a 12-year high in October 2024, and with U.S. monetary easing and renewable energy demand surging, the squeeze is on.
Supply isn’t keeping up—global silver production, including recycling, is projected to lag demand by 7% in 2025.
What does this mean for silver prices? History suggests a breakout is coming. When lease rates spike, it’s often a precursor to a supply crunch that pushes spot prices higher. Silver’s already up 27% this year to around $38 an ounce, but with lease rates screaming, I wouldn’t be shocked to see $40 or higher by Q4.
The gold/silver ratio, currently around 88:1, is historically high, suggesting silver is undervalued relative to gold. If silver outperforms, as it did in past bull markets, we could see that ratio drop to 60:1 or lower, implying big upside.
Silver miners are also primed to benefit. Companies like First Majestic Silver and Pan American Silver have been consolidating, but with lease rates signaling a supply crunch, their margins could explode as prices rise. My X posts last month flagged First Majestic as a breakout candidate, and it’s already up 15% since then. If you’re not following Outsider Club on X, you’re missing these real-time calls—my track record there shows consistent wins, from gold’s 2024 surge to Platinum’s rally.
Here’s the bottom line: Lease rates are the market’s early warning system. Platinum’s spike last year showed us how it works—tight supply, soaring lease rates, then booming prices and miner stocks. Silver’s lease rates are flashing the same signal now. With industrial demand roaring and supply struggling, silver could be the trade of 2025. Keep an eye on those lease rates, and don’t sleep on the miners.
All the best,
Christian DeHaemer
Current track record for American Stock Investor:
Average Open Portfolio Gain | 81.40% |
Average Closed Portfolio Gain | 124% |
Total Gain | 92.44% |
