SILVER Shorts are BURNING - Prices 'Cannot Be Stopped to the Upside': Ed Steer

Commodity Culture Interview with Ed Steer – December 30th, 2025: A Deep Dive into Silver & Precious Metals

Key Concepts:

• Structural Deficit in Silver: The consistent demand exceeding silver mine supply, creating upward price pressure.
• Bullion Bank Short Covering: The process of large banks repurchasing silver contracts they previously sold short, driving up prices.
• Bonfire of the Silver Shorts (Ted Butler): A scenario where short sellers are forced to cover their positions rapidly, causing a parabolic price increase.
• Comex: The Commodity Exchange, a futures and options market.
• Gross vs. Net Short Position: Gross short position refers to the total number of short contracts held, while net short position is the difference between short and long contracts.
• Critical Minerals: Resources deemed essential for national security and economic prosperity.
• SILJ/9point Silver Equities: Exchange Traded Funds (ETFs) focused on silver mining equities.
• Dory: Silver concentrate, a semi-processed form of silver.

I. Silver’s 2025 Performance & Recent Volatility

The interview, conducted on December 30th, 2025, centers on silver’s dramatic price surge in 2025, particularly the 10%+ rise on the final trading day of the year followed by a partial retracement. Silver was trading at $75.73 at the time of the interview. Ed Steer attributes this volatility primarily to short covering by US bullion banks, who were heavily short the market. He notes that in April, these banks held a net short position of 29,000 Comex contracts, which they have since reduced to a net long position of 773 contracts, covering 29,000 contracts in the process. Each short contract covered contributes to price increases. The initial surge on Friday was described as the beginning of the “bonfire of the silver shorts,” a term coined by the late Ted Butler to describe a rapid, panic-driven short covering event. A margin call increase by the CFTC on Friday was an attempt to curb the price rise.

II. The Long-Term Structural Deficit & Price Management

Steer emphasizes that the recent price action is rooted in a five-year structural deficit in silver – demand significantly exceeding supply. He argues that for the past 50 years, silver prices have been managed, and the current situation represents a potential breaking point. He states that there is a finite amount of silver above ground that bullion banks are willing to release to meet the growing deficit. This deficit, estimated to be at least 100 million ounces annually, is unsustainable in the long term. He believes the current price increases signal the end of this price management scheme.

III. Bullion Bank Activity & the “Bonfire” Scenario

A central argument is that the current rally is not driven by new long positions, but by the forced covering of existing short positions held by bullion banks. Steer details the shift in US bank positions from a net short of 29,000 contracts in April to a net long of 773 contracts currently. He highlights that while US banks are now net long, they still maintain a substantial gross short position of 18,000 contracts that must be covered. He warns that continued short covering will inevitably drive prices higher, potentially to “unimaginable” levels. He believes that allowing the price to run unchecked could lead to bankruptcies among heavily shorted institutions.

IV. Potential for Parabolic Price Movement & Financial System Impact

Steer acknowledges the possibility of a parabolic price increase, referencing Ted Butler’s “bonfire of the silver shorts” scenario. He cautions that a four-digit silver price (over $1,000/oz) would likely bankrupt the entire financial system currently short silver. Even a three-digit price ($100-$200/oz) could cause widespread insolvency among trading houses and financial institutions, referencing the 2008 Bear Stearns collapse, which was partially triggered by a $2 billion margin call in silver and gold. He notes that the margin calls experienced on Friday and the potential for larger calls if the price continues to rise are significant threats to market stability.

V. China’s Role & Export Controls

The discussion turns to China’s increasing involvement in the silver market. New export controls, taking effect shortly, require a license to export silver from China. Steer believes China could use these controls as a weapon, potentially restricting supply to the global market. He notes that Chinese companies are actively securing silver supplies from South and Central America, and that China is aware of the impending supply crisis. He emphasizes that the geopolitical implications of the silver shortage are becoming increasingly significant.

VI. Silver Miners & Equity Performance

Steer observes that silver mining equities have underperformed the price of silver in 2025. While silver is up 158% year-to-date, the SIL ETF is up only 159%. He attributes this to potential manipulation or suppression of silver mining stock prices. He suggests that silver equities are currently undervalued and represent a potential investment opportunity, but advises new investors to consider broad-based silver equity ETFs (like SILJ or 9point Silver Equities) rather than individual stocks due to the volatility and complexity of the sector. He notes that gold equities are outperforming gold by 2.35 times, while silver equities are lagging significantly.

VII. Long-Term Outlook & Investment Strategy

Steer presents a bullish long-term outlook for silver, arguing that the structural deficit is a fundamental shift that will sustain higher prices for years to come. He believes that once the price rises significantly, it will remain at that level. He states he would not sell his physical silver holdings, viewing it as “pure unadulterated wealth” and a form of money. He suggests taking profits by selling equity positions when the market surges. He differentiates this situation from past silver price peaks (1980, 2011), arguing that the underlying supply-demand dynamics are fundamentally different this time.

VIII. Mainstream Media & Market Awareness

Steer notes an increasing, though still limited, amount of coverage of silver in the mainstream press. He believes this is a sign that awareness of the silver shortage is growing.

Notable Quotes:

• “This time it’s different…we are in a structural supply demand deficit.” – Ed Steer
• “The shorts are in dire straits.” – Ed Steer
• “If they let the price run like that, you know, the price would be heaven only knows what and there’d be a lot of bankruptcies around.” – Ed Steer
• “I would not want to short silver or any other precious metal for all the tea in China.” – Ed Steer
• “Silver is money.” – Ed Steer

This summary provides a detailed and specific account of the interview, preserving the technical language and nuances of the discussion. It aims to be a comprehensive resource for understanding Ed Steer’s perspective on the silver market and the broader precious metals landscape.