Silver Volatility Whiplash, Physical Shortages and a Metals Bull Market Still Unfolding
- Gold and silver saw another wild, volatile week, with silver swinging hard before closing around $77.71 per oz, while gold showed relative strength and finished higher near $4,966 per oz.
- Silver’s sharp selloff pushed the gold-to-silver ratio back up to 64, a dramatic move from just ten days ago when it sat near 44, highlighting how stretched silver’s price swing volatility has become.
- Much of the media focus blamed silver’s drop on a large Chinese trader’s short positions on the SHFE, though exchange data and enforcement actions suggest excessive leverage was the real issue.
- Western speculative demand hasn’t helped either, with call option betting on the SLV ETF ballooning to nearly $40 billion—roughly half of the world’s annual silver supply being wagered on paper.
- Despite price swings, the physical silver story keeps tightening, as combined silver inventories at China’s SGE and SHFE have fallen to just 27.1 million ounces.
- That inventory level barely covers China’s annual EV silver demand, reinforcing how thin the global physical silver market has become after years of steady drawdowns.
- London silver lease rates jumped this week, signaling further physical tightness and backwardation, where buyers pay more for immediate delivery than for future silver.
- Bullion dealers in Switzerland and elsewhere are reporting physical silver bars and coins shortages, a familiar sign in strong precious metals bull markets despite recent price pullbacks.
- Macro signals continue to favor gold, with Ray Dalio warning that the global monetary order is shifting and that gold has already outperformed major equity markets.
- Key ratios back the long-term bull case, as gold continues to outperform U.S. stocks and housing on a relative basis, suggesting this bullion cycle still has plenty of room to run.
Speculative excess is colliding with shrinking bullion inventories, while gold and silver quietly gain ground against stocks, housing, and fiat currencies.
Gold and silver just lived through another roller-coaster week, with sharp price swings masking what’s really happening underneath the surface. Physical supply continues to tighten globally, while speculative excess gets shaken out in dramatic fashion. Big-picture signals—from exchange inventories to global capital flows—suggest this bullion bull market is far from finished. Watch the full video to see the data, charts, and context that explain why these moves matter and what could come next.
- The spot silver and gold markets had another mixed and volatile week.
- The silver spot price top ticked near $92, bottom ticked near $64 and closed the week at $77.71 oz bid.
- The spot gold price showed relative strength versus silver in the selloff and closed the week up at $4,966 oz bid.
- The spot gold silver ratio swung wildly in the silver selloff and closed the week at 64, a full twenty ounces over its recent low near 44 only about ten days ago.
Another wild week for precious metals, especially so in silver bottom ticking around $64 oz in last evening's (2/5/2026) trading.
We're going to get into larger fundamental evidence on why this ongoing bullion bull market remains in tact, and while violent and volatile, this is a price shakeout on the long road ahead.
The lead story of this week was the Western world financial media suggesting one of the reasons why we've seen much silver price volatility to the downside of late, they're suggesting much of it was due to a large Chinese whale's concentrated short silver positions on the SHFE.
After making billions of yuan going long gold futures in China since 2022, apparently Bian Ximing and his Zhongcai Futures trading firm built a large net short position from late last year into the recent rally that sent silver to its recent nominal price high near $121 oz.
The silver price flushings in Asian hours this week even caused China's SHFE to publicly announce rule violations of 6 group accounts likely under the control of one entity. Nobody is getting their gambling money back. Seems like slap on the wrist time.
Never mind that they were reportedly net short about as much silver backing the entire SHFE at the time.
Well at least Western media gave over-levered longs a face to scapegoat and scream at.
Never mind that Western gambling junkies recently poured into silver options bets thus far in 2026, to the tune of 6 times what they were betting back in 2026.
Call option bets on unsecured SLV slush fund hit nearly $40 billion dollars late last month. Yes equivalent to about 1/2 the world's annual silver market supply simply gambling on one ETFs price directions.
Let me remind us of another famed silver bull who should have taken his own advice, unless you're a market rigging insider, short term gambling is for eventual losers. Own bullion outright, long haul.
You see even with all the price up and down volatility in silver, the fact remains that the large industrial silver bar supplies around the world continue to draw down.
Last week I showed you the SGE and SHFE had merely a combined 30.5 million ounces of silver in their warehouses. It got worse this week.
Now down to 27.1 million oz of silver between the two Chinese exchanges.
That's about as much silver needed for China's EV auto demand of about 15 million electric cars per year, about 1.67 oz of silver laced within each.
So some 220 million oz that have left China's combined exchanges since their silver inventory peaks way back during Covid 2020.
Silver lease rates in London popped higher this week suggesting further physical tightness on goes there too aside from China and collapsing COMEX Registered piles. Remember almost 100 million of India's 225 million of silver import demand last year, that had to come from the UK.
Shoutout to @KarelMercx on X for this Bloomberg chart showing the 1-year silver swap rate minus US interest rates, now at extreme negatives (below -2.9%), worse than 2008/2011 peaks.
This indicates silver bullion backwardation: where silver bullion buyers pay premiums for immediate physical silver over future delivery, signaling tightness and bullion shortages.
Reasons include surging industrial demand (e.g., solar, EVs, etc.), silver exchange vault drains week to week ongoing, and silver investment demand picking up with recent price selloffs.
Look at now vs back in pip squeak 2011, remember this later on when I cite 2011 as a minimum long term target for important ratio levels we should always monitor.
Turning to another hallmark of how you know this silver bull still has a long way to go.
Clive Thompson reported this week, that gold and silver bullion dealers in Switzerland are running out of product to sell (https://www.youtube.com/watch?v=ZqJ7T8sQ_pM). Same stuff happening in the United States, and in other countries around the world.
Sold out apparently... the gold price in Switzerland has already done more than a 3 fold multiple price climb from its ancient 1980 nominal price high.
In this recent silver price selloff around the world, the Swiss silver price has nominally receded back below its old 1980 nominal price, apparently silver is just tying it shoes laces.
In time silver will not only catch up to gold, but will outrace it for a good duration to follow.
After this brief message we're going to look at some more bigger picture, bullion versus other major investment markets in the USA particularly stocks and housing.
One of the findings suggests this bullion bull market is going to places even 1980 could not reach in relative value appreciation terms.
The spot silver and gold markets had another mixed and volatile week.
The spot silver price top ticked near $92, bottom ticked near $64 and closed the week at $77.71 oz bid.
The spot gold price showed relative strength versus silver in the selloff and closed the week up at $4,966 oz bid.
The spot gold silver ratio swung wildly in the silver selloff and closed the week at 64, a full twenty ounces over its recent low near 44 only about ten days ago.
Billionaire former hedge fund trader Ray Dalio was recently on CNBC banging the table over the tech-tonic plate shifting in financial and capital markets. Have a look and listen to what he is politely trying to get across to viewers.
The forth cyclical turning of bullion outperforming US Stocks seems to be upon us.
The S&P 500 / Gold ratio has recently broken down to as low as 1.29 oz of gold to buy the nominal S&P 500
at the time.
Historically when the 1.4 oz level gets broken there are years and years that follow with bullion outperforming the US stock market.
Look back to this ratio's 2011 lows and even 1980 low levels to get a sense of just how drastic this could go through this decade into next.
Nominal DJIA cheerleaders were out this week celebrating the nominal record high 50,000 number hit. They even had some cool hats.
What's even cooler is knowing that on this Dow / Gold ratio chart, we already ticked 9 oz of gold to buy the nominal Dow and that the 2011 lows in this ratio are a good conservative target to come.
Wether this ratio hits 1:1 parity again as it did briefly in the 1980 gold bull market is anyones guess.
The current breakdown and rollover of this key ratio is factual and staring us all down square in the face.
Beating on the bullion relative purchasing power ratio drum, SD Bullion CEO Chase Turner had the following to say about bullion vs median price US housing this week.
This past week I posted another article on my free Troy Ounce Observer Substack describing how Bullion is Melting Toward Fair, Then OverValuation.
Bullion is currently revaluing fasted versus US median priced housing on a historic basis.
What gold has already done recently will likely shock you as it did myself.
If we simply use the National Association of Realtors (NAR) latest median US house price quote of $415,200 for the middle-of-the-pack US house sold today in Q1 2026.
Well, the napkin math shows that gold has made US housing cheap on a relative basis over most people’s lifetimes (415.2k / $5600 oz near price high recently = 74 oz).
A median house in Q1 1980 was about $63,700, divided by the then-peak gold price in January of that year, and you find that 74 oz was the same ratio at the time.
Now, a normie without a broader bullion-over-bonds understanding of our changing multi-polar world might learn this data and think: sell gold, buy houses.
Well, I strongly suggest to you that this ratio will go even lower over time. Currently about 2 in 5 US homes are still owned by the aging Baby Boomer demographic. And as that inventory turns over in the coming years with bullion bull marketing further.
You get the idea. In terms of bullion versus the stock market we have a long way to go still until even historical fair value ranges.
Go check it out if you want to get a bigger picture feel for bullion's historical relative values over time. They swing wildly and right now we are swinging back toward bullion likely revaluing well much more valuable relatively than near anything you can name.
References:
Chinese trading firm Zhongcai nets $500mn from silver rout
https://www.ft.com/content/4c612f53-e2ff-4325-838d-e0317cf29dd0
S&P 500 vs Gold chart:
https://www.tradingview.com/chart/FcuvNTuC/?symbol=SPX%2FOANDA%3AXAUUSD
Dow Jones Industrial Average vs Gold chart
https://www.tradingview.com/chart/FcuvNTuC/?symbol=SPX%2FOANDA%3AXAUUSD
Bullion Melting Toward Fair, Then OverValuation by James Anderson
https://jameshenryanderson.substack.com/p/bullion-melting-toward-fair-then
