Silver May Be the Most Suppressed Asset Ever (Uncut) 03-28-2025

Silver May Be the Most Suppressed Asset Ever – What Happens Next Could Be Historic | Peter Krauth

Welcome back to Kitco News, I’m Jeremy Safran. Well, gold has hit another new record high as investors rush to safety after President Donald Trump announced new auto tariffs. Now, there’s fears of a broader trade war reignited the gold rally, of course, pushing April futures up nearly $50 on the day to trade at a new high of above $3,070 an ounce.

And if you can believe it, this is gold’s 17th record high this year. But what about silver, a lot of people are asking? Well, silver is also up more than 40% in the last 12 months, outpacing gold and even other most major asset classes, yet its record high of just below $50 remains out of reach with spot prices currently trading at around $35 an ounce. However, the question is, is this about to change? Today on the show, we’re digging into a story that’s heating up online, but hasn’t really broken through the mainstream headlines yet.

The hashtag silver squeeze is trending once again, bringing echoes to the 2021 retail silver rush that briefly sent prices soaring and rattled institutional markets. Now, here in late March of 2025, the movement is back and it’s dubbed silver squeeze 2.0 with social media platforms like X lighting up over a planned collective buying event set for March 31st. Now, the idea here is to buy up as much physical silver as possible to put pressure on what they claim is a manipulated paper market.

Now, joining us to break it all down and to help us understand if this movement could spark a real market disruption is one of our friends, Peter Krauth. He is the author of the great silver bull and he’s also the editor of the silver stock investor. Great to see you, Peter, as always.

Jeremy, always a pleasure to be with you. Well, we got lots to talk about, my friend, particularly on the silver front. I feel like I got to give a quick little explainer to the viewers, you know, because the silver squeeze in 2021 was an attempt by retail investors, primarily from the Reddit forum, Wall Street Bets, to create a short squeeze in the silver market, similar to what was executed with the GameStop stock.

It’s also worth noting that the gold silver ratio sits near 88.9, which is historically suggests silver may be undervalued relative to gold. So let’s start with the basics, Peter. Why is silver squeeze the hashtag trending again right now? Well, there’s been a lot of silver flowing into New York from London.

There’s concern about tariffs, of course, and if tariffs are imposed, they could potentially affect gold, affect silver, copper, in fact, has been moving a lot as well from from east to west. And interestingly enough, a lot of this metal is ending up in it’s moving to New York, but it’s ending up in private vaults. So I just wanted to sort of throw that in.

And that’s sort of an interesting aspect to to sort of what’s going on. And there’s as there has been for for a long time, ongoing talk about the potential that silver prices are manipulated and kept down. And interestingly enough, you know, I’m actually myself wondering about the the March 31st.

You know, that’s just a few days away. It is before these new tariffs that are that Trump is talking about should kick in on April 2nd. It’s the end of the month, end of a quarter.

And it’s interesting that, you know, this took to see what kind of effect this could have. You mentioned earlier there was a similar kind of event that took place. I write about that in my book and in some detail that took place in late January of 2021.

So, you know, just for a bit of context, we were into the COVID period for about a year at that point. And there was this call on Wall Street bets on Wall Street bets on Reddit, which, as you as you alluded to, you know, it sort of was a step that came on after this whole sort of GameStop phenomenon. And what they did was they encouraged people to buy the SLV ETF to kind of trigger a short squeeze on silver futures, because that’s the idea is that there’s always there are always such large amounts of of naked, basically naked silver shorts in the market, in the futures markets, and that these are there to help suppress the silver price.

So what happened at that point was in a matter of about three days, silver went from twenty five dollars to twenty nine fifty. Interestingly enough, gold was actually flat during that period. So it really was very much silver specific.

The average silver stock was up about 30 to 40 percent in just three days. The volumes on silver miners were up six to seven times. And we saw SLV, its volume, its daily trading volume was up nine times.

So, you know, there were some some interesting effect on the silver bullion dealers as well because people went out and bought physical silver. Yeah, yeah, absolutely. And, you know, I’m curious because we keep talking about twenty twenty one, obviously now with this tariff talk, we’re in a different environment.

So, you know, I’m kind of curious about how it’s comparing to that year so far. I mean, as you mentioned, March 31st is basically around the corner now, but there’s a lot of chatter online. How does it compare of what what we saw back in twenty twenty one? So, I mean, you know, we were in the early days of covid, that’s a little bit different.

What’s what’s what’s different now, I think, to some extent, is the availability and the premiums on physical silver. They’re much more sort of in line with what you’d consider normal. However, interestingly enough, what I find kind of lines up is that there is a fair bit of tightness in the market.

We’re seeing that because lease rates on silver are several times what’s considered normal. So that’s a clear indication that the physical silver market is really quite tight. And so what you have is you have this member of the of the X or formerly Twitter community, Squeaky Mouse, who’s encouraging people to buy physical silver or buy the Sprott Silver ETF, which is considered a solid physical silver ETF where they don’t lease out the silver and there’s no sort of, I guess, questions around that sort of treatment of the silver that’s used to back the ETF units to go out and buy either physical or Sprott PSLV ETF to basically squeeze the shorts out of their naked position and help drive the silver price higher.

There’s about 223 million silver ounces that are that are net short right now. That’s about 25% of the annual mine supply. So it certainly is significant.

And if you look at the ratio of paper silver to physical silver, it’s something like 378 to one, which is well beyond any other futures market for for metals of any of any metal, I should say, or any any commodity. So really outsized sort of ratio of paper to physical. Yeah, yeah.

Well, hopefully, I mean, we got a lot of viewers that are watching right now hoping that this hits the silver equities eventually, those silver miners to bringing it back here. I got to talk about it, because despite the gains in 2021, the attempt did not really lead to a sustained short squeeze. The price increase was not dramatic enough to force significant buying by short sellers in the market return to more stable levels.

But I’m curious, Peter, will this be different this time? Yeah, I mean, you know, jury’s out on that. I hate to kind of venture and make too much of a guess because I honestly have the sense that it’s going to be similar to what we saw back in 2021. At the time, actually, I had just started my newsletter and I was I was like a month into that.

And I was telling so this is quite the event to have happen and talk about. And I was telling subscribers that I thought what would happen was this would would basically eventually die off. And the reason for that was because it was not a sort of a fundamental driver in terms of suddenly more and sustained demand.

This was sort of a call to action. And, you know, sure enough, that’s kind of how it played out. We did have like you said, we had that surge in silver prices.

We had the surge in volumes, trading volumes for the mining stocks. And I told subscribers, I said, you know, if you’ve got some big gains, which you probably do in a bunch of the stocks that are in the portfolio, I you know, if you if you feel like you want to sort of lock in some of those gains, I don’t blame you. I think it’s probably a good idea because I don’t I just don’t see this kind of action being sustained.

And my sense is that, you know, if we do get some kind of a squeeze this time around, that it is likely to be similar. It could be, in fact, possibly stronger if there’s enough people that really get, you know, on board. And it could actually even last somewhat longer than it did back in twenty twenty one.

But unless you see this sort of fundamental shift in demand, this sort of clear bump up, whether it’s for some reason from industrial or from investment demand, I’d have to say that I’d actually expect that you’d have to see some sort of big industrial change in demand, a bump up in demand, because that’s where you’ve got less leeway, less flexibility in terms of, you know, being able to to use or not use the silver. I like to say that industrial demand is kind of what provides a rising floor under the silver price. And it’s the investment demand that kind of kind of ebbs and flows that comes back and causes these these silver spikes.

And I do want to mention one thing about, you know, industrial versus investment demand in the last maybe 10 years or so, industrial demand and investment demand, where I include, you know, physical bars and coins, I include jewelry and silverware, I consider that altogether to be investment demand. And that’s about they were about 50 50. Well, that has morphed in the last 10 years or so, mostly, I’m going to say, due to things like electronics, EVs, but especially solar, which has just absolutely exploded in terms of silver demand.

So we’re now at a point where industrial represents about 60 percent of the market and investment is left with about 40 percent. So what is different and what I do find very compelling is that if we do get this surge in investment demand, it’s going to have to buy from that 40 percent now instead of the 50 percent it was about 10 years ago. Basically, what I’m saying is there’s less silver, physical silver available than there used to be for investment demand.

And that could really help sort of drive a bigger and faster squeeze and perhaps even a bit of a more sustained squeeze. Yeah, interesting. I mean, some people are calling this a grassroots rebellion against Wall Street manipulation.

From your perspective, I mean, how real is that concern? Well, I mean, you know, there there has been this talk of manipulation for a long time. This is something people can look up. It’s it’s been in the news for quite some time.

And there are a couple of ways that the big bullion banks are basically, you know, considered to to do to do this kind of manipulation. One of them is by basically having or offering large amounts of naked futures contracts out on the market all at once. And that typically it’s interesting that this tends to happen.

And you can look at the silver price, you know, on a daily basis, go to KITCO, you can look at the charts there. That’s what I do. And interestingly enough, you do see that the price of silver tends to when there’s pressure, it tends to come early in the morning, sometime between about 830 and 11 a.m. That’s when the silver trading happens on the New York COMEX.

Later in the day, it happens in Europe or earlier in the day. And then later in the day, it happens as well in Asia. But it’s interesting that you get these strong and relatively sudden drops in the silver price, typically during New York trading, which is, as I say, relatively early in the day.

You don’t seem to see that when the trading takes place in Asia and in Europe. So that’s certainly something to consider. And as I say, the suspicion is that there’s these large volumes of futures that are dumped onto the market.

And that sort of freaks out some of the smaller players and saying, oh, my goodness, all of a sudden there’s this big offer to sell large quantities of silver. I better get out. And it causes the silver price to drop.

The second way is that it’s something that we’ve certainly heard about for years is something called spoofing. And this is apparently a real thing where what they do is they will enter sell orders, large sell orders in the market. Again, that freaks out a lot of the smaller players that are, you know, sort of retail traders, smaller traders to think that all of a sudden there’s this huge amount of silver being offered for sale, which should cause the price to fall and they want to get out.

So they basically hit their sell orders immediately without regard to the price practically. But these spoofed orders that were placed, these large sell orders are quickly withdrawn like they may be there for seconds or a portion of a second and they’re quickly withdrawn. But the damage is done.

So they don’t, in fact, end up actually selling the silver that was in that large sell order. But it was enough, as I say, to freak out a lot of the smaller traders, cause them to sell and that gets the price to drop. So these are the kinds of, I guess, tactics you could call it that are used to try to, you know, press silver prices lower.

And at least, you know, it certainly looks like that is what takes place on a short term basis. But that’s been sort of drawn out for years and years now. Yeah, years and years.

Thanks for explaining that, actually. I haven’t heard it so eloquently put there for a while. We’ve got a tax supply and demand.

Of course, when we’re on this topic, there’s a lot of talk online about depleted inventories, especially at the LBMA. What’s actually happening with silver supply right now, Peter? So, so let’s give it a bit of context. You know, interestingly enough, if you go back about four years, I started talking about this about at least a year ago.

So, you know, the idea or the question was, if there’s so much demand and we’re seeing silver supply deficits now four years in a row, averaging about 200 million ounces a year. Just for context, also the silver market, the supply is about a billion ounces. And that’s about 85 percent mined silver and about 15 percent comes from recycling.

So about a billion ounces of supply every year. But demand is about 1.2 billion ounces. So we’re short supply versus demand about 20 percent.

And we’ve seen this happen for the last four years. This was the case again in 2024. But so, you know, last year I started looking at this and saying, well, if we have these consistent deficits, obviously, you know, the consumers, especially industrial consumers, they absolutely need their silver.

They’re getting it somewhere. So then I started to look at the inventories in the futures on the futures exchanges. We’re talking about the large ones like the Shanghai, the LBMA and the COMEX in New York.

And their inventories have been very clearly being drawn down. This goes back to early 2021. And I’d say on average, you’re looking at about 40 to 50 percent of those levels have been drawn down over the last four years or so.

So to me, that’s basically the explanation for what’s been happening. These big consumers and I also think that they’ve been able to and I’ve heard others say this as well, that they have been able to because you can buy physically backed silver ETFs. And if you own significant amounts of it, you know, if you meet the minimum thresholds, you can actually go to the ETF and say, I want to redeem my my units for physical silver.

So, you know, there’s work involved and there’s paperwork and deliveries and so on, but it can be done. And if you’re a big enough consumer of silver, that’s certainly one way to get to your silver. And you’re basically doing it at or near spot prices.

So the fact that these big consumers could go to the futures markets, hold a long contract, wait for it to expire, ask for delivery or buy a silver ETF that’s physically backed, go to the issuer and say, here are my units. I want the physical silver in exchange. They’ve been able to go out and do that, draw down on these secondary inventories and not pressure sort of the mining side of supply to bring more silver supply to market.

To me explains why overall we’ve seen the silver price more or less plateau, you know, so far on the upside since early 2020 or mid 2020, around $30. We’ve seen 30, 32, 33. It’s sort of reached 35 back in last October.

But if you look at averages, the peak has been somewhere around 30, 32 range. And I think that, you know, these big consumers have been able to go and draw down on these secondary above ground supply stocks of silver and not pressure for new supply to come to market. But this can only go on so long.

You know, TD last year had a great report that was basically thinking along the same lines, saying we can expect maybe 12 to 18 months at most. So, you know, six to 12 months have gone by since for this kind of scenario to play out where we’re getting to dangerously low levels in the in the secondary inventories, especially on the especially on the futures exchanges. So the LBMA certainly is at that point.

Now, Jeremy, layer on top of all of this, what’s been going on with Trump tariffs and the concern of, you know, if you want to bring silver into the US, you’re importing it that you’re going to have to pay a 25% tariff, let’s say, on your silver, on your gold, on your copper. So a lot of movement of these metals has we’ve seen come from especially from London and moving to New York to get ahead of these potential tariffs. So, you know, we’ve seen huge drawdowns in London.

Some people will say, well, OK, you know, not a big deal. All you’re really doing is shifting the silver around and it’s not like it’s disappearing or being sort of consumed. That is true, except, like I said at the beginning, that we’re seeing a lot of these metals go in, go to New York, go to the COMEX and then eventually go to private vaults.

Again, you’ve got people saying, well, you know, if inventories get low enough, we’ve seen it time and time again that, you know, there are these private hordes of silver. People around the world, Asia in particular, own silver and that if the price gets high enough that, you know, we’re going to see that silver come to market. And I completely agree with that.

My argument, however, is or what I want to point out is what I said in the middle there. If the price is high enough and to me that needs to be a lot higher than where we are today, much higher silver prices. And yes, that silver will come to market.

But I think we need to see 45, 50 and well beyond that to get meaningful amounts coming back into the market and try to help balance supply and demand. OK, that makes more sense. I mean, you know, it’s hard for me not to talk about the retail side of this, too, because are we really seeing physical shortages and higher premiums at the retail level? I mean, a lot of this product hasn’t been moving.

No, that’s true. In fact, a good point. You know, just last fall I was talking, I’d gotten some some feedback from people in the industry saying some of the bullion dealers are having a hard time.

They’re not really selling much physical silver. They’re actually getting a lot of they’re actually buying a lot of physical silver from people selling to them. And yet you’ve got places like Costco, for example, and Walmart.

I mean, Costco has been selling physical gold and silver to the tune of about 200 million dollars worth per per per month. So we’re looking at, you know, a billion somewhere around a billion one point two billion dollars of silver every, you know, on a yearly basis. There’s even talk that some dealers may be actually going to buy their physical bullion from Costco, for example.

So you do have silver moving into retail hands, perhaps also into bullion hands. Sorry, bullion dealer hands. It’s just it looks like some of the supply or some of the distribution really may have shifted.

And, you know, you don’t get, obviously, a lot of transparency on in terms of what’s really been going on, either from the dealers or from someone like Costco. But there has been a fair bit of movement. And, you know, yes, the premiums are high.

They’re not where they were, you know, when we were at the peaks in covid, but they’re still relatively high. And so it’s not cheap to do to buy physical silver. I don’t know if to see these kinds of premiums come back to where they were traditionally, which was somewhere around, you know, the 12 to 15 percent range.

I think it’s going to take some time for that to happen again. I would not be holding my breath. If anybody’s out there waiting to see, you know, the historical premiums on silver to actually buy some silver, I certainly wouldn’t wait for that.

Yeah, just hold it out. OK, well, I have to ask you about prices. Obviously, there’s a lot of viewers right now wanting to know where the heck we’re going with this thing.

I mean, Kitco Mining recently spoke with renowned investor and industry titan Eric Sprott, who is the chief executive officer of the Eric Sprott family office. He told us that silver prices have been manipulated for the past five decades in a breakout with a price target of 250 to 500 dollars is, quote, entirely possible. So I’m curious to get your thoughts where you see silver wrapping up this bull run.

Well, I must say, Jeremy, I’m glad to say I’m in the same I’m in the same camp. And I don’t know if people think Eric’s crazy, but or if they think that I’m crazy. But I’m happy to be, let’s say, in company with Eric.

I said in the book, which I published three years ago, that I think that we’re going to ultimately see 300 dollars in silver. And, you know, just to hear Eric talking about 250. So I’m near the bottom of his range.

You know, he’s talking about 250 to 500 dollars silver. And I’ve I’ve heard very, very credible fund managers talk about potentially anywhere up to about 500 dollars silver. So, you know, in the near term, I think we’re close as we speak.

We’re at 3425, I think, in silver. I think we will see 35 dollars, which was last year’s peak in October, reached at some point this year in the first half. And I think we could probably see 40 dollars in the second half of this year.

And then that all time high of 50 dollars, I think there are really good odds we’re going to see that taken out at some point next year. Now, Peter, we’re so close. We’re so close.

I keep watching the charts here. You know, silver is also hitting record high by and other currencies, too. It’s worth mentioning, including the Australian dollar.

When can we see silver hit new record highs in the U.S. dollar? I mean, when is it likely to happen? And in what macro environment? Yeah, I mean, you know, like I say, I think so that all time high would be 50 dollars. I think we’re going to see that at some point next year. You know, it’s not a question of if it’s a question of when.

So, you know, making these forecasts is is a bit of a shot in the dark. But, you know, if look, we’re heading one way or another to some sort of more difficult, I think, economic conditions, whether or not we get into a an actual recession, which I think there are strong odds of still at this point at some point, you know, between now and maybe third, fourth quarter of this year. And even if it doesn’t happen, which I could also see because governments are looking to spend again.

I mean, Germany, for example, is saying now it’s willing to actually change its constitution to be able to raise its debt more than a certain percentage of its GDP. And, you know, this used to be a haven for conservatism. And, you know, the the I’m not going to say excuse, but the I guess the reasoning is, you know, some of the green side of of the of the political spectrum.

And so a lot of that has to do with, as I say, a lot of a lot more spending. Interesting thing is that, you know, it’s not just Germany, but but Europe at large, I see doing that. And, you know, you know, we’re both in Canada, we’re in the midst of a of an election campaign.

A lot of promises are being made, basically all or nearly all of those are very inflationary. That’s why I think we are about to hit, you know, new inflationary conditions. And if you think about what I was saying earlier about Europe and rearming, that’s interesting in two ways in terms of inflation.

One, the the spending will cause obviously, you know, are likely gold and silver to do very well because their inflation hedges. But at the same time, what that’s going to do is it’s going to cause the consumption of metals to go up tremendously because rearming absolutely unequivocally needs a lot of metal. And, you know, you could think about the base metals like copper, zinc, nickel and lead, all of that sort of thing.

But silver is crucial. We we don’t have specific numbers, not by accident, but but silver is crucial in military spending. It’s crucial in electronics.

You have all of that stuff in military, you know, equipment and rearmament. So silver will be certainly a part of of the the group of metals that will benefit from these these big spending programs. So, you know, look for this to unfold over the next few quarters.

And that’s why I think that at some point next year, silver at 50 dollars is certainly not out of the question. OK, silver at 50, everyone will be happy to hear it. I have to ask you before we go here, Peter.

I mean, once that does happen, once we see silver break through this 40, 50 dollar level, is it going to be like 2021? I mean, do we get ready for another sell off or can it be a more sustained run this time? I mean, I do think that the 50 dollar level at this point, you know, look, there are two typical possible scenarios. It’s such a long term level to break out from because the first time silver hit 50 was back in 1980, and then it took until 2011, in April of 2011, before it hit 50 for a second time. Silver is the only metal that’s still today below its 1980 high.

So that’s just remarkable. And, you know, I’m not a technical analyst. I do understand it to some extent.

But, you know, people who spend their time doing this kind of thing, experts are saying this is this will be one of the biggest, if not the biggest technical breakout of any asset in modern history because of the length of time it will have taken to rematch those previous highs of 50 dollars. And so that’s why, you know, many of them are calling for potentially much, much higher upside that it could just, you know, it’s uncharted territory. It could absolutely take off and run from 50 dollars and maybe go to 70, 80 or 100 dollars in short order after that.

The other, you know, perhaps the other way of looking at it is if you look at what has happened when you see these big run ups to milestone prices, is that it could bump up against 50, you know, for quite some time that it could test that 50 two times, three times. But eventually, once it breaks beyond it in a meaningful way, like I say, you could certainly see, you know, 20, 30, 50 dollars tacked on beyond that in very short order. So it could get very exciting very quickly.

And, you know, I guess what I would say is be ready for anything. Yeah. Be ready for everything.

And of course, you run this newsletter, too. I mean, what’s your advice to retail investors watching this unfold? Should they join in now? Should they be proceeding with caution? I mean, you don’t want to run. What are we at here? Thirty four, almost thirty five dollars.

We don’t want to miss out on the trade. No, right. Exactly.

So, you know, here’s how I how I explain it. If someone does not own any silver, what I would say is because you can never really know what’s going to happen, I would say, you know, at least buy a little bit, you know, get your feet wet, get some some some silver. And if you have sort of a larger amount in total that you want to allocate, I would say do it in tranches, maybe buy a little bit.

Now watch how it behaves. If there is a little bit of a pullback, which, by the way, wouldn’t completely surprise me. I mean, if you look at gold, it’s become somewhat overbought, I think in the very near term, at least silver is less so.

But that, you know, if you get a bit of a sell off in gold where you could see it, I think potentially, you know, somewhere back below 3000, I was actually quite surprised that when it went above three, that it stayed there, that it went to, you know, 30, 50, 30. And like you said today and the future is 30, 70. That’s just tremendous.

But like I say, again, technically, it’s to me looking a little bit overbought in the near term. I think we could see 29, maybe even as low as 28 in gold. And I think that although silver is not as overbought, I think that the effect of a bit of a near term correction goal would lead into silver, drag it down a little bit.

And so we could possibly see silver somewhere around 30 or slightly below 30 in a near term correction scenario. So that would be a great opportunity to actually, you know, if you started to take a position now to add more to build on your position and that allows you to average down a little bit. But I’d say don’t wait.

Get started at least. Get started by the dip. All right.

Peter Krauth, of course, author of The Great Silver Bull and editor of The Silver Stock Investor, both of which you should check out particularly right now. Thanks for joining us, my friend. We appreciate you.

Thank you, Jeremy. Always a pleasure. Thanks, Peter.

And to our viewers, of course, is hashtag Silver Squeeze 2.0, the beginning of a major shift in the silver market or just a little bit of noise here. Of course, we’ll be tracking it all right here on Kitco News. So make sure to hit the subscribe button.

Turn on alerts. I’m Jeremy Safran. Thanks for watching.

We’ll see you next time.