Today we look at silver’s breakout above $36, the gold-silver ratio’s collapse, the potential for a silver squeeze, and the murky world of COMEX corruption, all pointing to silver hitting $86/oz over the medium term, and $120/oz down the road.
Silver’s on fire, breaking $36.04 per ounce as of June 5, 2025—a 13-year high, smashing through a triple-top resistance from 2012.
Avino Silver and Gold (ASM), which I told you to buy around $1 a few months ago just hit $3.68.
Gold to Silver Ratio
The gold-silver ratio, recently above 104:1, has dropped back to 94:1 with gold at $3,407. That’s still high compared to the historical average of 65:1, signaling silver’s undervalued and ready to run.
With industrial demand surging, supply dwindling, a massive short position on the COMEX, and whispers of a potential squeeze, silver’s path to $86 looks solid over the next few months. Let’s break it down.
First, the fundamentals. Silver’s industrial use is skyrocketing—solar panels, EVs, 5G, and medical tech consumed over 700 million ounces in 2024, per the Silver Institute. Demand’s projected to grow 5-10% annually, driven by green energy and India’s 29% jump in jewelry demand. Meanwhile, mine production is stuck at 25,000 metric tons, with a 184-million-ounce deficit in 2023, which was likely worse in 2024. This supply-demand mismatch is a solid foundation under silver’s price. Add in macro tailwinds—persistent inflation, Fed rate cuts, a softer dollar—and it is no wonder that silver is breaking out today.
The gold-silver ratio’s says that silver is undervalued. The last two times it hit higher than 100:1 was in 1991 and 2020.
Historically, when the ratio gets this stretched, silver catches up fast. In 2020, it peaked at 125:1, and silver surged 150% in months as the ratio fell.
The ratio is dropping now but it is still well above the 65:1 average since the 1970s. If gold climbs to $3,500, and the ratio compresses to 50:1, silver’s at $70.
A drop to 35:1, as seen in 2011 when silver hit $49.80, puts it at $100 with gold at $3,500. That’s the math, and history backs it.
Silversqueeze
Now, let’s talk the COMEX and the short position mess. The COMEX, where silver futures trade, is a hotbed of controversy. Banks and financial institutions hold massive short positions—hundreds of millions of ounces, often exceeding annual physical supply.
As of early 2025, COMEX data shows commercial shorts at record levels, with some estimating 800 million ounces shorted. These shorts, led by major banks, are accused of suppressing silver prices to protect their positions. The CFTC’s own reports show concentrated shorting by a handful of players, raising red flags about market manipulation.
This brings us to the silver squeeze potential. If physical demand (from industry, investors, or even a coordinated push like 2021’s #SilverSqueeze) outstrips deliverable silver on the COMEX, shorts could be forced to cover.
The COMEX reportedly holds only 30-40 million ounces of deliverable silver against 800 million in contracts—a leverage ratio that’s unsustainable if buyers demand physical delivery. In 2021, a Reddit-driven squeeze pushed silver to $30 briefly.
Today, with industrial demand tighter and ETF inflows rising (SLV saw $500 million in 2024), a squeeze could send prices soaring. If shorts scramble to cover, $50-$60 is a near-term floor, setting the stage for $86- $100.
Allegations of price rigging—banks flooding the market with sell orders or spoofing—aren’t new. The CFTC fined JPMorgan $920 million in 2020 for manipulating precious metals markets, yet skeptics say little’s changed. If regulators crack down or a squeeze exposes the paper-physical gap, silver could spike violently.
I’ve been pounding the table for silver and silver miners since last August. My newsletter readers over at American Stock Investor are up 315% in Avino (ASM), 306% in Discovery Silver (DSV.TO), and 95% on Alamos Gold (AGI).
But don’t worry, this rally is just getting started.
All the best,
Christian DeHaemer
Outsider Club
