Gold & Silver: "The Urgent Investment" As Supply Runs Low!

Key Concepts

• Silver hitting $50/ounce for the first time.
• Gold to Silver Ratio and DXY US Dollar Strength Index as indicators for market tops.
• Comparison of current metals bull market to the early 2000s (2003-2006).
• Signs of urgency in precious metals markets globally.
• Price backwardation in silver and its implications.
• Potential impact of new US-China tariffs.
• Scarcity of physical gold and silver.
• Price forecasts for gold and silver in 2026-2027.
• Profit-taking strategies for mining stocks and physical metals.
• Counterparty risk and shifting to tangible assets.

Silver Reaches $50/ounce Amidst Global Market Shifts

The video begins by highlighting a significant milestone: silver reaching $50 per ounce for the first time ever. While some data sources confirm this, others show it just below the mark. This achievement is particularly noteworthy when considered in the context of historical market tops. The speaker points out that previous peaks in 1980 and 2011 occurred when the gold to silver ratio was around 80 and the DXY US dollar strength index was near 100. The current situation, with these indicators still elevated, is described as "unprecedented" and suggests that the peak of the current metals bull market is not yet in sight.

The speaker posits that the current metals bull market can be compared to the period between 2003 and 2006 during the early 2000s bull run, indicating substantial upside potential. This is driven by a "major monetary transformation" and a growing awareness among investors, including smaller retail investors, about the potential unwinding of the 1971 shift from a metals-backed currency to a fiat system. This shift is leading to early signs of urgency, with individuals who previously did not track precious metals prices now buying gold and silver in anticipation of future events.

Global Signs of Urgency in Precious Metals Markets

The video then delves into the "signs of urgency" observed in precious metals markets worldwide, particularly contrasting the situation in the United States with other regions. While Americans are often seen selling gold and silver at local coin shops, other countries are experiencing queues to buy these metals. Examples cited include Sydney, Australia, and Asian markets like Japan, Singapore, and India. In Europe, silver products are reportedly going out of stock, and dealers are paying above spot prices to buy back silver from investors. In Poland, where the speaker resides, dealers are actively buying silver from "stackers" at nearly $56 per ounce, a stark contrast to the less-than-spot prices often offered by US dealers.

This "real tightness in supply" has led to a phenomenon known as price backwardation.

Price Backwardation Explained

Price backwardation occurs when the spot price of a commodity is higher than its future price. This is unusual, as futures prices are typically slightly higher than spot prices. Backwardation signals either a genuine supply shortage, where buyers are willing to pay a premium for immediate delivery due to concerns about future availability, or significant market speculation. The speaker believes both factors are at play for silver.

While acknowledging the possibility of an immediate "squeeze" and a rapid ascent to $100 per ounce, the speaker cautions against ruling out short-term volatility. The supply issues have been long-predicted and are now manifesting. The speaker draws a parallel to oil in early 2022, when backwardation led to a spike from $90 to $130 per barrel due to fears of supply disruptions related to the Russia-Ukraine war. However, the speaker notes that this oil price surge was largely speculative and short-lived.

For silver, the speaker anticipates that institutions like the LBMA and major bullion banks, in cooperation with refineries, will likely intervene to temporarily resolve the current supply issue. This is similar to what happened earlier in the year when gold delivery issues caused concern. Therefore, while the current situation is exciting and validates existing beliefs, the speaker advises maintaining a calm approach.

Potential Impact of New Tariffs and Scarcity

The video then addresses the potential impact of renewed trade tensions between the US and China, specifically the possibility of 100% tariffs returning. The speaker notes that the initial reaction to previous tariffs, under similar market fundamentals (a move away from dollars towards metals), triggered a sell-off across various commodities, including metals, despite gold and silver holding up relatively well by the end of the trading day. While the speaker believes these tariffs are ultimately bullish for gold and silver, they could cause short-term pullbacks, especially for silver, if a coordinated effort is made to address the London silver supply issue. The speaker advises treating any such pullback as a buying opportunity, as the supply fix is expected to be temporary.

The core argument for higher prices is rooted in the fundamental scarcity of physical gold and silver. The speaker provides figures: approximately 3.1 ounces of silver and 1.2 ounces of gold per person on the planet. This limited supply, coupled with increasing demand as people "wake up" to the need for these assets, creates a strong upward pressure on prices.

Price Forecasts for Gold and Silver

Based on historical data from 1978-1980, 2009-2011, and 2004, and comparing average closing prices (while deliberately excluding blow-off top highs for stability), the speaker presents new price forecasts for silver and gold. These forecasts are based on inflation-adjusted prices, acknowledging that US inflation data might be understated.

• Silver: By 2026 or 2027, the average closing price is projected to be above $60 per ounce, with a high around $96 per ounce.
• Gold: The average price is forecast to exceed $4,500 per ounce, with a high of $5,776 per ounce.

The speaker reiterates that any pullbacks should be viewed as buying opportunities, not reasons to sell, as the data and models strongly support higher prices.

Profit-Taking Strategies for Mining Stocks and Physical Metals

The final section of the video addresses a viewer question about selling metals or mining stocks when a major bull market is anticipated. The speaker clarifies their personal strategy, emphasizing that they are not selling physical gold or silver. Instead, they are selling 10% of their mining stocks.

The speaker explains their bullish stance on mining stocks, which began in July 2023 when they were largely out of favor. They entered the market due to low downside risk, undervaluation, and the expectation that mining stocks would outperform metals. Since then, the GDX large miner ETF has seen a significant increase (over 116% in 2025, as of the recording date), outperforming gold and silver.

However, the speaker cautions that this outperformance is an exception, not the rule. Mining companies are subject to various risks that metals are not, including oil prices, rising wages, mismanagement, and jurisdiction risks. Historically, gold has outperformed the GDX ETF since its inception.

The decision to sell 10% of mining stocks was a pre-planned strategy to hedge against a potential pause or pullback in silver prices at the $50 mark, which was expected to disproportionately affect mining stocks. With their mining portfolio up 175%, the speaker has executed this sale, covering capital gains from their dividend wallet.

Instead of reinvesting these profits back into mining stocks after a potential pullback, the speaker plans to secure these profits in physical metals, as they are nearing a milestone in their gold holdings. This strategy of shifting paper asset profits into hard assets is presented as a prudent way to reduce counterparty risk and secure gains in tangible assets outside the volatile financial system. This strategy is particularly relevant for those sitting on substantial mining profits, not for those new to mining stocks.

The speaker concludes by reinforcing their continued bullishness on mining stocks, holding onto 90% of their initial investment. The core message is that selling a portion of profits from volatile assets like mining stocks to acquire tangible assets like gold, silver, or land is a sound strategy for risk management and profit preservation.

The video also briefly highlights a new Summit Metals tenth-of-an-ounce wallet, designed to hold ten coins, which is presented as a useful product for building a fractional gold stack to manage expenses without liquidating larger coins.