The compelling chart below illustrates how the purchasing power of $1,000 in silver ounces has changed over time. In 1960, $1,000 could buy 1,087 ounces of silver, but today, it purchases only 29.74 ounces—a staggering 97% decline in the dollar’s purchasing power relative to silver. This means that the same amount of silver in 1960 could buy roughly the same quantity of goods and services then as it does today, whereas the dollar has lost significant value. That’s a powerful reason to consider storing wealth in physical silver. They do so on behalf of central banks, such as the Federal Reserve, which seek to maintain confidence in paper currencies like the U.S. dollar.
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Silver’s Dual Nature as Both Industrial Metal and Investment
Unfortunately, this suppression discourages both existing silver investors and potential newcomers, which is precisely the intended goal. By keeping silver artificially low, the manipulators aim to undermine assets that compete with the U.S. dollar, which itself is no longer backed by anything. Starting from a base of 100 in 1970, this index has skyrocketed to over 20,000 by February 2025—an astonishing gain of 19,900%. To see what one of these slams or tamps looks like on an intraday chart, let’s examine a particularly egregious example from Friday morning, February 14th. While the daily chart above provides a broader view of the price action, the intraday chart below captures exactly how it unfolded that morning. Bullion banks rely on the assumption that most people won’t scrutinize their tactics too closely—but that’s exactly what we’re going to do here.
What Is Silver Squeeze 2.0 and Why Is It Happening in 2025?
Additionally, silver has served as a store of value and a hedge against inflation and economic uncertainty, making it a popular investment choice for individuals seeking to diversify their portfolios. “Shares of the Trust are not subject to the same regulatory requirements as mutual funds,” according to the iShares site. Unlike its predecessor in 2021, which originated on Reddit’s WallStreetBets forum, this new squeeze has been meticulously organized by a growing community of silver enthusiasts and financial freedom advocates on X. The movement has already attracted hundreds of thousands of participants who are committed to purchasing physical silver on or before the designated date.
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This industrial demand creates a fundamental floor for silver prices that didn’t exist to the same degree in previous market cycles. To summarize, silver is heavily manipulated and suppressed by bullion banks like JP Morgan and UBS, acting on behalf of central banks. The price of silver should be significantly higher than its current level. The black line on this chart represents the New York Intraday Silver Index, which tracks the theoretical price of silver if one were to buy at the New York open, hold throughout the trading day, and sell at the New York close. This index further illustrates how silver’s price is regularly pressured downward during U.S. market hours before rebounding in overseas sessions.
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With the Asian and European markets closed, trading volume and liquidity are significantly lower, creating the perfect conditions for bullion banks to manipulate silver’s price with minimal resistance. This lack of market depth allows them to maximize their impact, giving them more “bang for their buck” when executing price suppression tactics. Investment banks holding short positions in silver markets often face difficult decisions during squeezes. As prices rise, these institutions must evaluate whether to cover positions at a loss or maintain shorts while posting additional margin.
Instead of preventing market manipulation, as the CFTC is supposed to do, it essentially acknowledged it and gave it tacit approval—which is infuriating. This clearly shows that the agency is protecting the big banks rather than looking out for everyday investors and traders. Stop-loss strategies should account for silver’s inherent volatility. Prudent investors maintain balanced exposure to precious metals lexatrade review within diversified portfolios. Financial advisors typically recommend limiting silver allocations to 5-10% of investment assets, recognizing both appreciation potential during squeezes and volatility risks during market corrections. Mint, Royal Canadian Mint, and Perth Mint all implementing allocation systems or suspending certain product sales.
If so, you know that it’s practically impossible to squeeze out the last remains of the paste. A short squeeze is possible – as GameStop’s drama reminds us – and it’s a nightmare for all short-sellers. The evolution of investment approaches, including systematic investing trends, has changed how investors interact with commodity markets like silver. Silver has long been prized for its intrinsic value and diverse range of industrial and investment applications. As a precious metal with unique properties, including conductivity, reflectivity, and antibacterial qualities, silver plays a vital role in various sectors, including electronics, solar energy, and healthcare.
- She leads the Investing News Network’s video and event coverage, and guides a team of writers reporting on niche investment markets.
- Silver producers with unhedged exposure typically benefit from price increases during squeezes.
- 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.
- For silver to reach the extreme price targets suggested by squeeze advocates, fundamental market structures would need to change dramatically.
Rising Industrial Demand
During normal markets, physical silver might command 5-10% premiums over spot prices, but during severe squeezes, these premiums can expand to 30-50% or higher for specific products. When a silver squeeze develops, retail dealers quickly exhaust inventory as customer demand outpaces normal restocking capability. During intense squeezes, premiums for physical products can double or triple as sellers price products based on replacement cost rather than spot market values. The squeeze ended dramatically on “Silver a random walk down wall street Thursday” (March 27, 1980) when the brothers couldn’t meet margin calls on their leveraged positions. Regulators had changed trading rules to limit position sizes, forcing liquidation that collapsed silver prices and led to the brothers’ financial ruin.
- Well, that means that spot is either being pushed down so the price is falling or the future is being pushed up by buying, the price is going up because the buying is being driven or being led by the futures market.
- It was getting national press coverage, but eventually fizzled out due to the price losing momentum and reversing direction.
- So, going back to my coffee analogy is, suppose you went to Jakarta, Indonesia, where there’s an awful lot of coffee comes to market.
- And that includes making sure that version of the client is compatible with that version of the server.
- 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.
Silver squeezes typically produce distinctive price patterns characterized by sharp initial rallies followed by increased volatility. The early phase often shows steady price appreciation as physical buying accelerates, followed by more dynamic price action as momentum traders and short-covering amplify movements. Within days of the WallStreetBets silver campaign, retail silver dealers worldwide reported inventory depletions, premium increases, and delivery delays. Major dealers implemented purchase limits as demand overwhelmed normal supply chains, with some reporting 24-hour sales volumes that typically took months to achieve. The silver market has a well-documented history of price control mechanisms that have prevented sustained parabolic price movements. Understanding historical trends in gold and silver investments provides crucial context.
Can individual investors influence a silver short squeeze?
Although gold is known as a safe haven, it’s common for it to fall in tandem with other assets during widespread downturns. The idea is that gold won’t drop as hard and will recover more quickly. PCE is the Fed’s preferred gauge for inflation, and is expected to impact its next rate decision.
Frequently Asked Questions About Silver Short Squeezes
Access Our Most Popular Guide, the Essential Guide to Storing Gold in Switzerland here. This is Keith’s fourth article commenting on the silver squeeze story. The videos also allege fraud, in the form of fractional reserve selling of metal. This crime is apparently not just for banks anymore, as the conspiracy theorists widen their net to accuse refiners, dealers, and depositories.
Physically-backed ETFs like SLV or PSLV may trade at premiums to NAV during intense squeezes as investors seek convenient proxies for physical ownership. For those interested in precious metals ETFs, exploring gold ETF strategies can provide complementary insights. When silver squeezes threaten market stability, regulators may implement various measures to restore orderly trading. These interventions often focus on futures markets, where leverage can amplify volatility. Common actions include increasing margin requirements to reduce excessive speculation and implementing position limits to prevent market domination. Medical suppliers utilizing silver’s antimicrobial properties in specialized products must navigate both cost increases and potential supply disruptions during squeezes.
Pure-play silver producers with high production margins and strong balance sheets tend to demonstrate the highest beta to silver price movements during such episodes. For those interested in this sector, a beginner’s guide to investing in mining stocks can provide valuable insights. A notable divergence has emerged between London and New York metal prices, with COMEX futures sometimes trading at significant premiums to London spot prices. This unusual spread suggests potential stresses in the physical delivery systems that underpin metals markets – precisely the vulnerability that Silver Squeeze 2.0 aims to exploit. Industrial demand for silver has exploded in 2025, driven primarily by the green energy transition and advanced electronics. Solar panel manufacturing alone is projected to consume over 160 million ounces of silver this year, while electric vehicles and 5G infrastructure continue to increase their silver component requirements.
It’s likely that a good portion of this volume came from traders scrambling to cover their short positions—a topic I’ll explore in greater detail later in this article. The heavy trading volume serves as a crucial confirmation of silver’s breakout, signaling that major institutions or ‘smart money’ are getting on board. This significantly reduces the likelihood that this is a false breakout. Another way to assess whether silver is undervalued or overvalued is by comparing it to various money supply measures. M2 money supply, providing insight into whether silver is keeping pace with, outpacing, or lagging behind money supply growth. If silver’s price significantly outpaces money supply growth, the likelihood of a strong correction increases.