Matein Khalid
My readers and friends know that I have been a boring perma-bull on gold since early 2024, when it became obvious that the People’s Bank of China was accumulating gold bullions as a hedge against an overvalued King Dollar and a capricious White House, which had just seized $300 billion in Russian central bank reserves to punish Putin’s invasion of Ukraine. The bullish gold trade became even more compelling after Trump returned to the White House last January and set his sights on gutting China’s $1.1 trillion export colossus with punitive tariffs as the Cold War between Washington and Beijing in the Pacific Basin intensified. Gold was $2600 an ounce and has now risen to $3600 an ounce, up an incredible 38% for 2025.
The latest gold buying frenzy has been amplified by Trump’s attacks on the Fed’s political independence, pressure on Powell to slash interest rates, an escalation in geopolitical tensions in the Middle East after the Israeli/US bombing attacks on Iran, fiscal angst in the US Treasury and British gilt bond market and the vote of no confidence against Macron’s hapless Prime Minister François Bayrou, his fourth PM in the past two years.
Silver is often dissed as the “devil’s metal” since its volatility is twice that of gold and silver markets can be notoriously illiquid. In fact, Texas billionaire Nelson Bunker Hunt lost his entire wildcatting fortune in a failed gamble to corner the silver market in 1980, when silver plunged from a high of $54 an ounce to as low as $5 a few years later. So I am neither surprised nor impressed that silver rose from 29 to 41.50 in 2025 as it hitchhiked on Dr. Auric’s Great Leap Forward. What now?
Historically, silver has traded as high as 2% the price of gold in 21 out of the last 50 years. Yet silver is now 41.15 while gold is 3610, this means optically silver seems dirt cheap as it is only 1.1% the price of gold. This “cheapness” is illusory due to the fact that 50% of silver mine demand is industrial and China’s deflation/Trump’s trade war have devastated industrial growth worldwide. My research on past relative value cycles between gold and silver tell me that the bull market in gold is secular and the silver gold ratios is in the early stages of a reval to 2% sometime in the next two years. Goldman Sachs believes that gold could trade as high as 5,000 an ounce sometime in 2026.
If there is no global recession, I see no reason why silver cannot trade as high as 1.50% of gold or $75 an ounce, even though it faces epic historic resistance from the 1980 Bunker Hunt high and the 2012 Euro sov debt crisis high at 50 to 54. Weekly Oscillators also tell me that silver miners are itching for a breakout against gold miners, I know GDX does best when earnings models imply a bullion price in the Stone Age (circa 2024 AD) while the price of energy has tanked by 12% in 2025. Net-net, silver has taken out its 35 high from both last October and March convincingly. This rally is no false breakout to be faded. A triple top breakout tells me it never rains in Planet Argentum, just like it never rains in Barry Manilow’s Southern California, but when it does, man, it pours.
Relative value and net price acceleration tell me that the autumn of 2026 could be the ultimate wet and wild party to own silver futures, this is an emotional trade for me as I once blew an entire year of Penn tuition money my Dad had wired to my Philly bank account in a failed bid to make a fortune in the silver futures market. In those days, when EF Hutton talked, the teenage Matt listened as if the oracle of Delphi had spoken. Strategy? Buy silver at 38 on the next gold profit taking to 3500 for a $50-52 target. The hunger games of capitalism can be super yummy when the stars, dear Brutus, are aligned just right with a triple top breakout.
Also published on Medium.
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