What Is This Gold and Silver Bull Market Telling Us?

Silver finally broke above its all-time high. Meanwhile, gold is setting records on what seems like a daily basis.

But what is this precious metal rally telling us?

There is more to it than central bank demand and investors seeking safe havens.

In this episode of the Money Metals’ Midweek Memo, Mike Maharrey takes a deep dive into the current dynamics of the silver market. He uncovers the underlying factors driving both gold and silver higher — a shaky global fiat money system and a paper market suffering from an acute shortage of metal.

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Mike opens the show with a word of wisdom: don’t confuse symptoms with the underlying illness.

“That’s because a single symptom can stem from a variety of causes, some of them minor, and some life-threatening. For instance, chest pain could just be heartburn. Or you could be having a heart attack. If you just pop some antacids and move on when you’re having a cardiac event, you can end up dead! The symptom is just telling you, ‘Hey, pay attention. Check this out. Find out the root cause.’

“The same is true in financial markets. Moves can be caused by a lot of things, and to really grasp what’s going on, we need to try to drill down and understand the fundamentals behind price movements.”

Mike then provides an overview of gold and silver’s price movement over the last week, noting that they are rising at a “mind-boggling pace.”

Mainstream financial analysts are scrambling to raise their 2026 price forecasts because prices have already eclipsed their earlier estimates. Mike references a mining CEO who said he wouldn’t be shocked to see $10,000 gold by the end of this decade.

“Now, $10,000 gold may sound like wishful thinking from a gold-bug, but that’s what they were saying about $5,000 a few years ago!”

Mike cautions listeners that we will likely see some price corrections, and some may be significant.

“Markets almost never go up in a straight line. In my opinion, down days are buying opportunities. For instance, if you bought gold last Friday when it was below $4,000, you’re already looking pretty good.”

So, what do we make of this? What is this gold and silver bill market telling us?

Many people are pointing out that it reflects a weakening dollar.

“And they’re right. That’s at least part of the story. The rise in the price of gold reflects the depreciation of the dollar.”

But Mike points out that using the dollar index to make the point is misleading. The index just compares the dollar to other fiat currencies. And the problem isn’t just the dollar.

“Gold is setting records in every major currency. The dollar index just tells you how the dollar is faring against other fiat currencies. It compares dollars to yuan, or yen, or euros, etc. This points to a breakdown of the broader global fiat system. Real money – gold and silver – are showing its metal (pun intended).”

Mike says there is another factor driving the precious metals markets, and it’s most evident in silver.

“So, let’s talk about silver. The price rise has been astronomical. The wild thing is that based on the technicals, there is plenty of upside remaining.”

Mike notes that silver is breaking out from https://moneymetalsexchange.medium.com/a-silver-tea-cup-this-epic-45-year-silver-pattern-should-have-traders-drooling-574b39e559dc" rel=”noreferrer”>a classic cup and handle pattern, and https://www.moneymetals.com/news/2024/03/25/what-is-the-gold-silver-ratio-why-should-we-pay-attention-to-it-003075" rel=”noreferrer”>the gold-silver ratio remains wide from a historical perspective, indicating silver is still underpriced compared to gold.

A deeper look at what’s happening in the silver market is revealing.

“The price has soared partly due to a massive, short squeeze and a shortage of available silver in London. As you’ll see as I walk you through this, a metal shortage is the key to understanding what’s going on with silver, why the price is rising, and why there is some panic in the marketplace.”

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Mike explains what a short squeeze is and why we’re seeing one now.

“This short squeeze has caused liquidity in the London market to virtually dry up. This has driven London benchmark prices higher at a very rapid pace, and it has caused a price gap between New York and London. The London spot price recently shot to a $3 premium over New York futures.”

Mike says this isn’t just about some investors getting hung up in a bad position.

“Looking at the Indian market provides a little more clarity on what’s actually happening. In fact, India could be the straw that broke the silver camel’s back. India’s silver market reveals deep structural problems indicative of the broader global market. Simply put, there isn’t enough silver. And risks of a major blowup are mounting.”

Indian silver demand is draining even more metal from London vaults. In fact, Indian traders are sourcing metal from wherever they can find it. Money Metals has even shipped 1,000-ounce bars to India.

We’ve also seen a huge spread between prices in the Indian silver futures market and the physical market. This has created an arbitrage opportunity that nobody is willing to take advantage of because they fear they won’t be able to get the physical silver.

This is exacerbating the existing structural shortage in the global silver market after four straight years with mining supply coming in below demand.

“When miners can’t produce enough metal to meet demand, users must source silver from existing above-ground stocks. But to entice people to let their silver go, the price must rise. Last year, there was record industrial demand for silver, but investment demand was tepid. But as the price neared record levels this year, investment demand has surged as well, stressing the market close to a breaking point.”

Mike notes that the situation is acute in India, but it is indicative of the global market.

We could see an easing of pressure as metal flows to London and India, but it is going to require higher prices. And as Mike points out, there is no fix for the underlying problem.

“There is a lot of demand for silver. And there isn’t a lot of silver to meet that demand.”

Mike says he doesn’t think it’s too late to get into this market. He recommends calling 800-800-1865 and talking with a precious metals specialist today and trading your paper for real money — gold and silver.