Will the Price of Silver Go Lower Than $64.00?

Silver Market Analysis - February 18th, 2026

Key Concepts:

• Gold-Silver Ratio (GSR): A metric comparing the price of gold to silver, indicating relative value. Lower ratios suggest silver is undervalued compared to gold.
• Hot Money: Short-term speculative capital seeking quick profits, often utilizing leverage.
• Leverage/Margin Calls: Using borrowed capital to amplify investment returns (and losses); margin calls occur when an investor’s account falls below a required minimum value.
• Comex Registered & Eligible Silver: Comex (Commodity Exchange) categories for silver; Registered silver is available for delivery against futures contracts, while Eligible silver is held in warehouses but not immediately deliverable.
• SLV (iShares Silver Trust): An Exchange Traded Fund (ETF) holding physical silver, often used by investors for silver exposure.
• Shanghai Gold Exchange (SGE) & Shanghai Futures Exchange (SHFE): Major Chinese exchanges for precious metals trading.
• Deflationary Issue: A sustained decrease in the general price level of goods and services.
• 45-Year Basing Pattern: A prolonged period of consolidation in silver’s price, recently broken.

I. Recent Silver Market Volatility & Causes (February 2026)

The discussion centers around the dramatic silver price fluctuations experienced recently, specifically a surge to approximately $125 followed by a 30% drop in a single day (February 30th, 2026). The primary cause identified is a combination of silver breaking out of a 45-year basing pattern and the influx of “hot money” into the market. This influx wasn’t solely physical demand, but significantly driven by leveraged positions in derivative markets (options). Investors sought quick profits (“scalps”), and the rapid price increase (from $70 to $120 in 30 days) was deemed unsustainable. The speaker notes the event coincided with the swearing-in of the 41st US Mint director in Washington D.C.

II. The Role of Speculation & Fear

James Anderson explains that the initial price run-up was fueled by speculation and the desire for quick gains. However, the subsequent collapse was triggered by fear and margin calls. As the price began to fall, investors with leveraged positions were forced to sell, accelerating the decline. This is described as an “elevator up, escalator down” scenario, highlighting the speed of the descent compared to the ascent. The fear-driven selling pushed the price down to as low as $64, before a partial recovery to around $78.

III. Establishing a New Silver Price Base

The analysts debated the establishment of a new base price for silver. While some believe it could fall to $55, Anderson suggests $64 may represent an interim low, based on sentiment observed during the price dip. He acknowledges the possibility of further declines, particularly in the event of a deflationary economic scenario. However, he believes the fundamentals remain sound. Long-term stackers were observed taking advantage of the price dip to increase their holdings. The Gold-Silver Ratio (GSR) at the peak of the price run-up was not as low as it was in 2011, suggesting further potential upside for silver.

IV. Gold’s Strength & Leading Role

Gold is described as being “strong” and leading the precious metals market. It recently reached $5,000 per ounce, a significant increase from $4,341 at the end of the previous year. The analysts emphasize that silver typically follows gold’s lead, and investors should monitor gold’s performance as an indicator of future silver movements. Gold’s strength is a positive sign for the overall precious metals market.

V. Technical Analysis & Historical Context (Charts)

The discussion shifts to technical analysis, examining charts spanning decades.

• Gold Chart: Shows the extreme volatility of gold’s recent price movement, with a rapid increase from $4,300 to $5,000 in 30 days. This is considered an unsustainable pace.
• Silver Chart (1950-Present): Highlights a 45-year “cup” pattern, suggesting a potential for significant future price increases once the breakout is confirmed. Historical breakouts from similar patterns have resulted in much larger and longer-lasting rallies. A previous cup formation spanning 105 years resulted in a 17x price increase.
• Dow Jones/Gold Ratio: This chart demonstrates the declining purchasing power of the Dow Jones Industrial Average relative to gold. Currently, it takes approximately 10 ounces of gold to purchase one share of the Dow. Historically, this ratio has fallen as low as 6.5 ounces (1980) and 1 ounce (past). A return to these levels is considered plausible.
• Silver/Gold Ratio: This chart shows the relative performance of silver compared to gold. The ratio recently peaked at 0.021, but has since fallen to around 0.015. Historical peaks reached 0.03 (1980) and even higher during the breakdown of the London Gold Pool.

VI. Fundamental Factors & Supply Dynamics

The discussion highlights the strong industrial demand for silver, particularly from China, which is now the world’s largest car manufacturer (with a growing electric vehicle sector). The supply of silver on major exchanges (Comex, Shanghai Gold Exchange) is shrinking.

• Comex Silver: Registered silver inventories have fallen by over 50% since September of the previous year, driven by Indian demand. Eligible silver inventories are also declining.
• Shanghai Gold Exchange (SGE): Silver inventories are at historically low levels (25 million ounces), barely sufficient to meet China’s internal EV demand.
• London Silver Market: The “float” of silver in London is estimated at around 50 million ounces, a small amount considering global demand.

VII. Paper vs. Physical Silver & Market Manipulation

The analysts suggest a disconnect between the paper price of silver (traded on exchanges) and the physical market. They allege that insiders in London are manipulating the market by artificially inflating prices, then shorting the market and profiting from the subsequent collapse. They also criticize the iShares Silver Trust (SLV) as a “slush fund” that doesn’t fully back its shares with physical silver. Metal is being pulled from Comex, SLV, and London-based funds, likely flowing to India.

VIII. Notable Quotes

• “Fear is a faster emotion than greed.” – James Anderson, explaining the speed of the silver price decline.
• “The fundamentals are still sound…gold is showing strength and it’s still showing strength which is great because gold is the thing that leads.” – James Anderson, emphasizing the positive underlying factors.
• “You have to remember what cycle you're in.” – James Anderson, stressing the importance of historical context.

Conclusion:

The analysis paints a picture of a silver market experiencing significant volatility due to speculative activity and underlying fundamental strength. While the recent price crash was painful for some, it also presented buying opportunities for long-term investors. The analysts believe silver has the potential for substantial future gains, driven by industrial demand, shrinking supply, and a favorable historical context. However, they caution against relying solely on short-term price movements and emphasize the importance of understanding the broader economic and geopolitical landscape. The declining Dow/Gold ratio suggests gold will continue to outperform stocks, and silver, following gold’s lead, could experience a significant rally in the coming years. The shrinking silver inventories on major exchanges further support the bullish outlook.