Matein Khalid
2025 was the year I was convinced that silver would outperform gold in a classic late cycle acceleration trade that is a recurrent theme in full throttle precious metal bull markets. This means, silver has a tendency to lag gold’s ascent until an inflection point at which prices breakout and then accelerate sharply on the upside. This inflection point was $36 an ounce in spot silver for me and I even wrote a post pointing out a new paradigm in silver. However, the catalyst to become a silver bull was the Trump White House, which ordered the US geological survey to classify silver (and copper) as a strategic mineral vital for US national security. So when Dr. Auric had a $400 sell off in late October while the LBMA squeeze led to 6.4% base rates in London.
Indian silver import data showed that physical demand in Mumbai had risen from 15 million to 30 million ounces, ETF inflows were on fire, the dollar had its worst six month fall since the early 1970’s and a chill in the labour market made Fed rate cuts essential. I knew that silver at 36 was a no brainer.
I wrote a post detailing a bull case for FCX, the world’s largest copper miner two weeks ago when its shares traded at $39 on the NYSE. FCX traded at 48 in the subsequent two weeks and I have now booked profits after a 23% run on the stock with an additional 9% kicker from CBOE options strategies in only 2-weeks. Merci beaucoup, red metal and FCX.
Silver and silver equities will be a core theme for me in 2026 though I will not post ideas as the white metal has psychotic volatility, 2X auric, but nothing like the suicidal 4X vols of Bitcoin, which is a path to a certain ruin for trusting lambs in Dubai who fall into the trap set by merciless crypto-sharks.
When silver surged to $65 an ounce, the futures exchange COMEX changed the rules of the game and raised margins by 10% to flush out overleveraged speculators who were already on maintenance margins. This was a historic move to preserve a fragile system built on high tech leverage and algorithmic models of volatility.
The clearing members of COMEX were forced to recalibrate net exposure to the metal in real time and hedge funds had to immediately lower risk buckets. A Dubai bullion trader whose sons I have known since my boyhood and consider some of my closest friends in life once told me about a silver options strategy that enabled him to make $200 million in COMEX. This strategy has now been perfected by some of the world’s most sophisticated macro hedge funds on Wall Street in a metal whose supply is price inelastic since 70% of silver is mined as a byproduct and whose demand curve is also inelastic as EV, robotics, 5G networks and AI data center components are all heavy users of silver. Silver is actually a faster conductor of electricity than Dr. Copper but silver cable wiring in home construction makes no sense as it is obscenely expensive.
Four factors make me an aggressive investor in silver ETFs, equities, futures, options and royalty trusts in 2026. Indian physical demand is still robust even as prices in rupees hit all time highs. The plunge in the Indian rupee to 90.75 makes the Bharati Nari housewife view silver as a safe haven metal akin to gold. Despite the three hard and three soft dissents in the last FOMC conclave, Trump will force two rate cuts on a Fed, whose $40 billion short T-bill purchase is soft QE even though it is the love that dare not speak its name.
Late cycle acceleration will be my trade posture du jour in silver in 2026 even though I warn that I have only lived through a handful of record highs in silver in 1979, 2011 and now 2025 for the simple reason that any parabolic move brings out grandma’s silver from the attic and triggers a brutal price corrections. The Nelson Hunt silver futures rally took prices upto $50 in 1979 before the bubble popped with a change of rules from the CFTC, COMEX and the Volcker Fed. Prices then bottomed at $5. This will happen next year if risk aversion or the unwinding of the yen carry trade by a Bank of Japan monetary tightening creates a global risk asset sell off, which will spare neither silver nor copper nor anything else. Fear is mission critical for survival in speculative markets!
Also published on Medium.
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