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As of December 30th, 2025, the price of silver is over $75 per ounce. This price represents a 160% gain just in 2025 alone, with most of that happening within the last couple of months. And on December 26th, in a move that had never happened before, silver was up over 10% in one single day. And that was followed by a price decline of 15% from top to bottom the very next day on December 27th.
In other words, we are experiencing more price volatility and a much higher price rise in silver than we've ever seen before. For silver bulls, this feels like a long-awaited and well-deserved victory lap and maybe even just the beginning of a much larger move, especially considering the fact that popular online metal dealers like SD Bullion are sold out on certain supplies and have processing and shipping delays of up to weeks. We see China banning exports for things like silver and even people like Elon Musk are saying this is not good. We have inelastic demand for silver in things like solar panels and electric cars, which is leading many people to say that the current move in silver is just the beginning. But that's what you always hear right at the top of bubbles that are about to pop. And price moves in a metal like silver of 50% in the course of about 6 weeks doesn't exactly scream sustainable bull market. When you take into account short squeezes, margin changes, and unaccounted for elastic supply, is this time really different, or should silver investors and traders be exercising extreme caution here? Let's go through all the real data and ignore the hype so that you can make an informed decision for yourself.
If you want the TLDDR, I am long-term bullish on silver. My positioning is currently net long, although I do have some short-term hedges or bearish plays on silver, but that is a minor position compared to my long. So, first let's talk about supply.
So, first let's talk about supply. It is true that for five years in a row now, we have had a situation in which the industrial demand for silver and the amount that's being purchased and used for building things like EVs and solar panels that has outpaced production of new silver supplies. In other words, silver that is being dug out of the ground and put onto the market. Part of the reason for this is because there is very little direct mining of silver. Most silver that is produced that comes out of the ground is coming out of the ground as a byproduct of mining for other metals. It's about 75% of all silver mining is just a byproduct of mining for things like copper and lead and zinc. This means that changes in demand or changes in price don't necessarily or at least immediately translate to large changes in production supply. If you are primarily a copper miner, you're not going to ramp up production of copper just because the price of silver is going up. And this deficit between what is being produced and what is being used is not going away. In fact, is actually accelerating.
Globally, we are seeing record demand for silver because we are also seeing record demand for things like solar panels and electric vehicles and electronics, semiconductors. Silver is an extremely useful metal in these things because of its conductivity. Which means the companies that are buying silver in order to make these things that they're making are going to continue to buy silver whether the price is $30 an ounce, $60 an ounce, or $90 an ounce. Now, because of silver's usefulness as an industrial metal, countries are locking down the exports of these metals and are spending more on the domestic production of these metals. For example, just this November, silver was added to the critical minerals list in the US. As I mentioned earlier, China is locking down exports, specifically of silver, and the political allegiances of many countries that a lot of the silver production comes out of are shaky, meaning they could lock down their own production or change who they want to do deals with. All of these factors are coming together at once to provide a superstorm of demand for silver without any real increase in the production of mind silver.
But that alone does not explain the price rise that you see on silver's chart today. It is a well-known fact that there is a lot of leverage that is deployed and used in the paper markets for various metals, especially metals like silver. This is something that banks have gotten in trouble many times in the past for for things like spoofing, manipulation of markets in order to make it seem like there are large orders where no large orders actually exist or placing actual naked shorts in order to soak up all the buying pressure so that the price doesn't go up and then later on closing out those shorts. As I have said from day one on this channel, manipulation is a gift to investors because to the extent something is being manipulated, that means you have the ability to buy that thing at a price less than its true value. Eventually, those shorts must be closed out. Otherwise, they never realize those profits. You can't hold a position open indefinitely. And if the price moves away, then what you get is a short squeeze where they have to close out because of the losses. And at least in part, that looks like a lot of what is going on right now. A lot of leveraged shorts being squeezed out, sending the price careening higher.
But it's not just leveraged shorts being squeezed out. We also have extreme leverage being used on the long side. Open interest on net long leverage bets in December of 2025 are at the highest they've been in years. This is extra buying adding fuel to the fire. But it's not just leverage longs from hedge funds and institutions. We're also seeing massive retail buying through things like the SLV ETF. In fact, the total silver in tons that the SLV ETF holds right now is at the highest it's been since 2022. So between the industrial demand, the retail demand, the institutional demand, and just the plain trading dynamics, it does seem like this bull market may still have legs to run on.
So what are the risks? Risk number one is unaccounted for supply. As everybody always says, the cure for high prices is high prices. And it is not just silver that comes out of the ground that contributes to supply. When silver hits $50, $60, $70 an ounce, guess what? A lot of people who have a lot of silver sitting in their vaults are thinking about. They're thinking about after 5 years, 10 years, 20 years, is it finally time to take some profits? In other words, a high enough price for silver will bring new supply onto the market to meet that inelastic demand. It's not just silver out of the ground that you have to worry about. It's silver out of the drawer. It's silver out of the safe and it's silver out of the vaults. And this signals one of the main differences between silver and something like gold. Gold is still a monetary metal for the most part. It does have industrial usefulness, but most of its value comes from it being used and stored and stockpiled as a monetary asset. But central banks and sovereign wealth funds and nations are not accumulating and hoarding silver today like they used to a few hundred years ago. They're still doing that with gold, but not with silver. Most of silver's value comes from its industrial usefulness, which is why the ability for those above ground stocks of silver that are being held in individual safes and in shares of things like SLV can very easily and quickly come onto the market if the price is just good enough.
The next risk, and this is a massive one that I think a lot of traders are not thinking about, is the fact that as of the time of this recording, it is near the end of a year in which this asset is up 160%. Which means there are investors and traders all across the country right now who are sitting on $10,000 of unrealized gains, $50,000 of unrealized gains, $500,000 of unrealized gains, a couple million of unrealized gains from either shares of SLV, options, futures, silver miners, or combination of the above. Thinking to themselves, "Yes, I have these big gains right now." And yes, they could evaporate quickly. But if I can hold on just two more days, just three more days until January 1st, then I can sell and I don't have to pay the taxes on this for an entire another year. But if I sell today, I'm going to owe the taxes on this this coming tax time by April 15th. Now, like I said, I'm recording this video on December 30th, 2025. This video is posted January 1st, 2026, Thursday, which means it is very likely by the time you are watching this video, the selling for the new year may have already begun. And there will be quite a few people who see the silver price drop, maybe on Thursday or Friday, and think, "Ah, I'm going to sell, but I'm going to wait till it comes back up because I think it's going to get back up to, let's say, 75 85. I think it'll get to 100, so I'll sell at 99. But maybe, just maybe, the bubble has already started to pop. Now, I'm definitely not saying that I think this will happen. But I think it's very possible that the selling pressure from everybody waiting until the turn of the year to realize their gains could mean that the top is already in. And that is a huge risk that not enough people are paying attention to.
The next risk is that price movements like what you're seeing right now where you see 160% in 1 year and 50% in 6 weeks are not the result of a 5-year mismatch between production and demand. Markets are forward discounting machines. It's not like the above ground supply for silver just suddenly ran out and all of the people investing and trading in silver and using silver for their industrial purposes suddenly realized, "Oh my gosh, there's no silver." If this move was strictly a supply and demand mismatch, it would have happened a lot earlier and a lot slower. Moves like this are more indicative of FOMO, leverage, and unfortunately bubbles. Which is why Google searches for the word silver are at an insanely record all-time high.
And the next risk is that silver's demand is not actually inelastic. In the very short term, sure, there's a lot of inelasticity, but silver can actually be replaced by things like copper. And the more expensive silver gets, the higher the financial incentive there is to replace silver with things like copper. Because even if swapping copper out for silver in something like a solar panel reduces its efficiency, the more expensive silver gets, the more worth it that trade-off becomes. Now again, that is not a switch that can happen in a short amount of time. And prices, as we have seen, can move extremely wildly in a very short amount of time. But high prices fix high prices and $150 silver means that there's a lot of manufacturers that are going to be panicking and spending a lot of money and a lot of energy on switching over to copper as soon as possible. Which means that that $150 silver from an industrial demand standpoint is not sustainable because the demand would go down from that.
And the final risk here is actually one of the things that has contributed to the price rising up so much and that is just the amount of money and the type of people unfortunately who are buying. Yes, one of the reasons why the price has exploded recently is because of the leveraged longs. But as we saw with the 15% draw down in one day, a margin requirement increase can snap that trend in half. You suddenly have to close out all of your leveraged longs because you are under collateralized. And that triggers a cascade of everybody else also getting stopped out. These things can turn around on a dime. And if this thing does start to turn around, you better believe those shorts are going to come back with a vengeance trying to slam that price back down like they always have. And web searches for silver being at an all-time high paired with SLV holdings of silver are signs of recent retail FOMO, not industrial demand inelasticity, not an asset that is being remonetized, and certainly not institutional adoption in portfolio allocation.
To be clear, I am bullish on silver. My net positioning on silver is net long, though I do have a small short-term short as of the time of this recording. So, personally, I am exercising extreme caution here. I am not expecting this thing to be $200, $300 an ounce in the next couple of months. And if it is, I am probably going to be loading up on a much larger short position. But short-term isolated booms and busts like this, I don't think should discourage the intelligent investor from investing in commodities for the long term. Here, what is going on in silver is evident that it is taking place across different commodities. We're seeing things like gold near all-time highs, copper miners near all-time highs, oil companies near all-time highs, platinum near all-time highs. And given everything that's happening with monetary policy and geopolitics around the world, I don't think any of that is slowing down anytime soon. But that doesn't mean that we won't have some booms and busts, some pain and gain, and some bubbles inflating and popping along the way. And so, I'd be exercising some extreme risk management and caution with silver at the moment. Not I would be, I am. As always, thank you so much for watching. Have a great day.