Jonathan Mergott, 14. Mai 2025
A note on silver
"We've been in a tight range for the last month straight between 32.50 and 33.50 basically. There's a number of issues here. First of all, in late March, gold was 3200 and silver was 35.50. then, as markets tanked and panic set in, gold ran to 3500, up 10% and silver crashed $8 in 3 days flat and is sitting here now down 10% from where it was. Outside of a few days or so,if you look at the AVERAGE ofit over weeks, months, silver is not outperfoming and neither are miners.
My ORIGINAL expectation target, the one I posted on Twitter Christmas eve 2023 before gold broke out was 2500 on gold and about 36 on silver. (And 50 GDX). Ultimately, We got WAY more than 2500 on gold and fell short 50c on silver and exceeded by 5%ish on GDX, but between then and now, HERE I revised those expectations down, because we were not performing well right off the bat. Silver took all of the typical 3 mos of rallying gold tends to do on a breakout to manage to break 30 to begin with, which was starting to look like it wouldn't even happen. When it did, we ripped from 30 to 33 in 24hrs, then consolidated, then dropped to 26. So if you bought the breakout, or even ahead of the breakout anticipating it, you had to have sold on a sun night to avoid riding it back down, which is the problem I keep citing. Then, over the next yr we managed to climb $2.50 above that level as gold went up $1,000 from 2500 to 3500.
You can do all the mental, and technical gymnastics you want, and most will, but anyway you cut it that's a major disappointment given what gold did. Be honest, if I told you 3500 gold 1 yr ago, everyone here, including myself, would have expected 50 silver MINIMUM.
But this par for the course here. We've seen it before and we'll see it again. Question: what is the FIRST thing silver did during the period ahead and after of the moves gold and silver made in the 2018-2020 crash period and the 2007-2009 financial crisis period?
Silver crashed, right? No, that was the SECOND thing that happened. The FIRST thing that happened is silver didn't go up with gold. 2008, silver was capped at 20 while gold ran up. THEN margin calls came and everything crashed. Gold went from 700, to 1k, back to 700 and silver went from 14, to 20 to 8.
Then, AFTER the financial crisis, as bernake played around with monetary policy until he came up with this idea "what if we monatize the debt but call it "QE"?" We pumped liquidity and stimulus and as gold ran from 700 to 1920 2009-11, silver ran from 8 to 50. Up over 500%.
2020, gold ran up from 1400 breaking it's bear market ceiling, the area it peaked at in 2016 and a few more times after, and ran to 1700 then crashed in 2020 back to 1440, then went to 2100.
Silver, which couldn't again, get above 20 prior to the crash (almost as if, the market knew it was coming and silver isn't the insurance asset you want to own in such a situation) as gold moved up to 1700, it peaked at 18, the. Crashed to 12.
Then ran to 30, up 150% in 6 mos, vs the 50% move higher from 1400 to 2100 on gold.
So what is the moral here? Like we've been saying, gold moves up AHEAD of a crisis as money seeks insurance. Silver tends to underperform in those situations. AFTER the crisis, when they pump liquidity, silver RIPS on the "reinflation" trade. In 2020 3x more than golds 50% gain. In 2008, again about 3x more than then 175% gold gained.
So here we sit, with gold running up from 2k to 3500 in 15 mos, and nobody knew why up until 4 weeks ago. And the entire time, silver is struggling to gain another 5% higher than it was 6 mos earlier, then losing it, then back up again, then down... Unable to push higher on the biggest move up in gold in 17 yrs. Where have we seen this behavior before *hint hint???
It's NOT going higher and it never does AHEAD Of the crisis. AFTER it crashes, it's massive. And I think we could see mid to low 20s then snap back up to 50 in no time. But everything that's happening here in silver is no different than 2008, and 2020 and now were seeing WHY this isn't a 2011 "silver is gonna catch up" run that everyone else has been expecting."
Source: Chat im Discord Kanal von Jonathan Mergott
