You got to know when to hold ‘em, know when to fold ‘em Know when to walk away and know when to run You never count your money when you’re sittin’ at the table There’ll be time enough for countin’ when the dealing’s done… — Kenny Rogers
I usually stand aside and keep my mouth shut when it comes to other people’s money, but Stevie Wilner, Chairman of the Floor Committee in the silver pit in the 80s, had to make rulings on other people’s money every day. It didn’t matter if they were fair or thoughtful rulings. Someone had to decide, to settle, and to put an end to anything that interrupted trading, which meant someone was going to lose a lot of money and someone was not going to lose a lot of money.
We felt sorry for the losers (not really), but we sucked it up and moved on. There were laws and unwritten rules. If you broke them, Wilner called to the podium for the fine pad and you got fined, usually $500. Fun fact: “fine pad” sounded a lot like “frying pan” in the din of trading and whenever we thought a fine was in order we yelled at Wilner to “get the frying pan.” Fond memories. In some ways, the markets haven’t changed very much.
In 1980 the COMEX put silver futures on liquidation only and silver crashed. On February 27, 1987 March silver traded $5.41. On April 27, 1987, 8 weeks hence and 3 days before 1st notice day, May silver traded $11.27. I sold 5 Mays at $11.25 to Ross Rowland on the opening. Two hours later May was locked limit down and April silver (a serial month) was trading $7.20…down 35%.
On May 10, 2024 I wrote: “[Bob Rubin called Warren Buffett] in 1998 and told him if he didn’t stop buying silver he’d be a very unpopular guy on Wall Street (fun YouTube).”
In 2011 when the Chinese were ramping silver from $20 in September 2010 to $50 in April 2011, the CME raised margins every day for a week and silver went down 33% in the first week of May…most of it in a few hours. The CME has raised silver margins 3 times this year, twice in December, so hearts are broken if you’re a card player.
When prices are low higher margins always put pressure on the weak side of the market. However, when prices and margins are rising and high they put pressure on new longs. In 2021 it was said Yellen bailed out the shorts with a blind eye to naked shorting.
A lot of people are talking about silver today, quick to tell you what and why; a lot of schadenfreude for the banks. If you haven’t noticed, I have pretty much kept my mouth shut about the good and bad of these rallies, favoring technical analysis and common sense. In that spirit I’ll offer my 2 cents on where we are now.
What I Think I Know
On Friday morning my preview quotation said, “A market that clings to its highs implies unfilled buyers below… ” later in my technical notes I said, “In long time frames, silver is still in an historic liquidity void, the range of which is $19/toz for the month of December alone! This is roughly equal to 100% of its average price for the entire 21st century occurring in fewer than 17 trading sessions.”
Friday was an exceptionally strong day on relatively high volume but it was not a day of panic; more like party. The rally was steady and progressive, with obviously (in hindsight) a large determined buyer constantly on the bid and raising the bid steadily from intraday high to high and bell to bell. The market opened on the low of the session in NY and closed on the high tick at the 4:45/5:00 PM data dump.
I haven’t seen Friday’s open interest COB yet, but COMEX open interest was down 2000 lots (10 mm toz) since December 22. Each session last week was an up day so I expect open interest to be down on Monday morning. If so, the implication for Friday’s move is modest net short covering and significant new length.
I am confident there was a disciplined and very large single-origin buyer in New York hours on Friday… and the order was unfilled. March COMEX was in light contango of roughly $0.50+ to London spot on Friday based high-to-high data (Grok).
In my vibe on Friday I said, “In my life” I had seen 5 episodes of silver prices increasing 100% in a 6-month period (or less) and I listed them. Each event was approximately 7 to 10 years apart. I said all of them had similar narrative development and, as I have said often in 2024 and 2025, I say again now: “You haven’t seen the real silver yet.” Well, here it is. The DNA is unmistakable going up and the end will be the same going down, in my opinion.
The Longs We Cannot See in Public Data
In every silver giant from birth to death of the cycle immense positions enter relative to its finite liquidity. For instance, 10 million toz is a notional $800,000,000 position, a mere bag of shells. If a big fund has a 100,000,000 toz position it’s only $8 billion dollars. A $10 move really doesn’t move the needle for houses like Citadel or Dalio. Buffett bought 130 million toz in 1997. Prices doubled and he made 10% of a bad opening on his Coca Cola position. I think some famous traders entered with size in the mid-$50s and who knows what is under the radar in Shanghai or Dubai or Moscow. It’s a big world and a small market and silver is the god of of greed.
At this stage of bullish development, I think mega positions are becoming populous and sizes of 10 to 50 million toz would not be uncommon. As long as it goes up, no problem. The sum of all longs that we cannot see in public data could be more than COMEX open interest (770 million toz/$60 billion), exclusive of COMEX. Plus global ETF holdings ($80+ billion…the spot float is $80 billion!) and futures and options and miners…the long position is big and growing, which means the average entry price of it is going up with it.
I covered ICBC for several years in the post-GFC and QE days and there were zero restrictions prohibiting the walk-in public from buying retail quantities of gold and silver over the counter in China. India is going to allow its citizens to collateralize precious metals for credit in 2026. Costco sells small bars and coins in vending machines. The cloud, AI, light-speed algos, and 5.5/23/365 equity and futures exchange trading has taken vertical development to warp speed velocity unlike any previous bull move. If faster with greater mass is different, it is different this time.
What I Will Not Know Until It’s Too Late
From the beginning of time to present about 55 billion ounces of silver have been mined. Of that total, credible sources think the total known above-ground stock is around 19 billion ounces. Think about that in the context of a few million ounces tormenting a paper/physical imbalance since mid October. If we were to construct a pyramid of physical silver accessibility it might look like this:
Most Accessible/Liquid (3–4 billion oz): COMEX/LBMA Exchange vaults = 1–1.2 billion toz combined overlapping ETF/ETP holdings, private/institutional bars & coins, commercial stocks. This is the float that has been rapidly depleted in the EFP squeeze in 2024 and the SLV OPEX squeezes in 2025… especially in London.
Highly Accessible/Price Sensitive (2–3 billion oz): Scrap-prone jewelry, silverware, flatware/antiques/old coins/primarily Western holdings. This is the current “first wave” hitting refineries now… Analysts expect 195–200 mm toz. of scrap in 2025. As prices rise so does this 200 mm toz number. This is the key.
Moderately Accessible (6–8 billion oz): Hoarded jewelry & decorative items … vast generational holdings mainly in private hands in India/Asia with cultural/religious significance. Triple digit prices for years might mobilize some of it.
Low Accessibility (4–6 billion oz): Industrial-embedded silver: electronics, solar panels, catalysts & chemicals, medical/photographic residues, batteries etc. Dispersed silver in products and landfills is effectively lost forever. To wit in part: 56 billion mined and 19 billion total known above-ground stock…. 36 billion toz gone. A very bullish long term trend for silver miners, in my opinion.
Recent supply-demand data is well known by now, but I will say in a nutshell, the deficit is expected to be the smallest in 3 years at 95 million toz in 2025 and expected to contract to between 30 and 60 mm toz in 2026 (Silver Institute/Metals Focus).
If You Don’t Know, You Don’t Know
There is substantial evidence that major metals refineries, particularly in the U.S., have significant backlogs of 3 to 6 months for processing silver scrap (including sterling silverware/flatware, coins, and good junk). Many refiners paused or stopped accepting new lots of scrap and sterling weeks ago. Higher lease rates for fine metals and funding costs made the supply chain worse. However, there are fresh posts about some refiners resuming limited buys of certain grades, but schedules are still tight into 2026. This sort of puts a clock on the rally for Q2, I think.
There is no way for us to guess how much silver is in the pipeline. But apart from scrap, the mines are going full tilt as well. This dynamic of newly mined material and high-grade scrap trying to sell silver with as much intensity as the demand side is trying to buy it is inevitable. When these forces will collide is impossible to predict, but there will be tremors…count on it.
Oh Shit
Friday’s vertical screamer was a typical “oh shit” moment in every bull run in silver. The next oh shit might happen when silver doesn’t stop going up because new metal trying to get through the refinery system won’t be available for weeks or months and there are no buffers. The last oh shit comes when silver goes down. No one on our side of the market will have any heads-ups to warn us and the banks are going to sell ruthlessly to any bid when the worm turns. We just had a 10% up day. Before this is over that is going to look like the bunny hill, imo.
In March 1980 the monthly range in silver was $22.15…the highest in history for 45 years as prices fell from $37 to $15 in a “liquidation only” panic. The December 2025 range was $22.70. This was a very orderly rally in monthly data, extreme but orderly. The old saying “stairs up, elevator down?”… These are stairs up. The elevator down is always an express.
One year ago it took 3505 ounces of silver to buy 1 bitcoin. If you sold that bitcoin for silver today it would fetch 1000 ounces. In the last 12 months BlackRock, owner of SLV, the largest silver ETF, and owner of IBIT the largest bitcoin ETF…and the associated financial and ETF community of each…have done everything in their power to make silver go down and bitcoin go up. Let that sink in. Yeah…
They manage $12 trillion. The top 5 wealth/asset managers hold $50 trillion of $140 trillion total global AUM. Is there an SLV/IBIT negative correlation or is it just a coinky-dink? Same owner, APs, administrator…nah, probably nothing there.
My Vibe
There have been zero force majeures or credible reports of severe financial stress on any bullion dealers anywhere. March silver is either in mild contango or flat to London. Quite a few readers have mentioned minor angst about taxes on gains.
In my opinion, gold rallying to $4500 and silver to $80 is actually an old-school bank run and that has been an ever-present narrative for 2 years. Instead of going to the counter and asking for the cash, investors are buying gold because they can. I don’t think longs with good location will sell their gold and silver. Will we see $50 again? It has been common price in history. Oil is trading on the $50 handle. Bitcoin is in the ditch.
I started writing bullish commentary in silver in January 2024. I was a passive long in silver for over a year. I am out of futures now because I have never gotten out better waiting for the top and getting stuck in the sell void on the back end is incredibly shitty. Been there, done that. You have to get out somewhere and I’m happy with 100%. Anyway…everyone has to decide what works for them.
A final thought about fine pads and frying pans. Preston Seml had a “crying towel” in his booth. Whenever anyone complained about a bad ruling or a fine…he handed it to him to wipe his tears…and there will be tears. There always are.
Market vibes is not a registered investment advisor, and comments are for informational use only. Any mention of a particular security, index, derivative, or other instrument is NOT a recommendation to buy, sell, or hold that security, index, derivative, or any other instrument.