Transcription
53% That's how far silver has fallen from its all-time high set just 5 months ago to where it's trading this morning. Gold just broke below $4,000 for the first time since November. The dollar is sitting at a 13-month high and in roughly an hour, the single most important inflation report of the quarter lands on a market that is already in freefall.
If you've been holding silver through this, you already know how this feels. If you're watching from the sidelines wondering whether to buy this dip or run from it, you're about to get the most honest answer anyone on this platform is going to give you. Because here's what almost nobody covering this crash is telling you. The same week silver is getting crushed on paper, the world's largest physical silver market is doing the exact opposite. And once you see why, you're going to understand why the next move in this story is not the move most people watching the candle are expecting.
I'm John. This is OG John AG. I don't do price predictions dressed up as certainty and I'm not going to pretend I know exactly where silver goes tomorrow. What I am going to do is walk you through every real number driving this crash, what those numbers actually mean, and the one piece of this story that flips the entire narrative on its head. Let's get into it.
The damage in full. Silver is trading near $57 to $58 an ounce this morning, down sharply from where it opened the week and sitting at its lowest level since December. 5 months ago on January 29th, silver touched an all-time high of $121.67. From that peak to today, the metal has given back more than half its value, somewhere in the neighborhood of 53%.
Gold isn't faring much better. It broke below $4,000 this week for the first time since November after peaking near $5,590 in late January, a decline of roughly 29% from its own record high. The gold to silver ratio is sitting around 67 to 1 right now. For context, the long-run historical band for that ratio runs between 50 and 60 to 1 going back over a century. At 67, silver is historically stretched relative to gold. Not at the most extreme level this market has ever seen, but firmly in territory that has, every single time in modern history, eventually corrected.
The dollar index is pinned near a 13-month high around the 102 level, acting as the single biggest mechanical weight on every dollar-denominated commodity right now. New Fed chair Kevin Warsh ran his first FOMC meeting on June 17th, held the policy rate at 3 and 1/2 to 3 and 3/4%. But, the committee's updated projections pushed the median year-end rate higher, with nine of 19 members now seeing at least one more hike before December. CME FedWatch has been pricing somewhere around a 2/3 probability of a September hike and close to 90% odds of at least one hike by year-end.
And within the hour, the Bureau of Economic Analysis releases May's core PCE, the Fed's own preferred inflation gauge, and the number this entire market has holding its breath for. April's reading came in at 3.3%. Consensus for May sits close to 3.3 to 3.4% core, with headline PCE expected near 4.1. I'll walk you through exactly what each outcome means for silver before we're done, because this release, more than anything else this week, is the next real catalyst. That's the board.
Now, let's talk about why it looks like this. Five things are hitting silver at once. Nobody wants to hear it's complicated, but the honest answer to why silver is crashing right now is that five separate forces are landing simultaneously, and conflating them into one headline is exactly how you misread this market.
The first and the biggest is the Fed repricing. Six weeks ago, the market was leaning toward rate cuts. Today, it's pricing a real chance of hikes. That's not a small adjustment, it's a complete reversal of the assumption silver's spring rally was built on. Silver pays no yield. Every basis point the market adds to expected future rates raises the opportunity cost of holding it relative to cash and short-term Treasuries. And systematic funds running rate sensitive models don't debate that. They mechanically reduce exposure.
The second is the dollar, which is really just the first force expressing itself in currency markets. A stronger dollar makes every ounce of silver more expensive for buyers holding yuan, rupees, or euros, suppressing international demand on the margin regardless of what's actually happening to supply.
The third is the strangest one, and it's the part most coverage gets backwards. The US-Iran peace framework, reportedly agreed in principle in Switzerland, has been a short-term headwind for silver, not a tailwind. Lower Hormuz risk has pulled oil down a couple of percent, and lower oil cools near-term inflation expectations, which removes some of the fear-driven hedge against chaos demand that had been propping up precious metals. Peace, paradoxically, took away a prop just as the Fed pulled away a different one.
The fourth is mechanical and calendar-driven. Quarter end lands on June 30th, days away. Institutions that ran overweight risk asset positions through the earlier rally are required to rebalance regardless of their personal view on silver's fundamentals. They sell liquid instruments to do it, and silver futures are about as liquid as it gets. This driver has a built-in expiration date, July 1st.
The fifth is technical. Silver has broken below several key moving average support levels on the daily chart, and momentum traders and algorithmic systems treat broken support as a sell signal regardless of the underlying story. Once a chart breaks down like this, it tends to feed on itself in the short run. More stop losses trigger, more momentum funds flip short, and the move extends further than the fundamentals alone would justify.
All five of these are real. None of them, on their own or together, has anything to do with how much silver actually exists in the ground, how much industry needs it, or what's happening in the market where the metal is actually delivered. They are entirely about positioning, rate expectations, and the calendar. Keep that distinction in your head because it's the hinge the rest of this video swings on.
The part that surprises everyone. Here's where this story stops being what the headlines are telling you. While COMEX has been marking silver down toward $57 to $58, the Shanghai Gold Exchange, the primary physical delivery market in the world's largest silver consuming economy, has been pricing the same metal at a meaningful premium. Different trackers catch the gap at different moments, but recent readings have shown the Shanghai benchmark running somewhere in the 10 to 18% range above the COMEX equivalent price before China's own import taxes even added on top.
Think about what that actually means. COMEX is a paper market. The overwhelming majority of contracts trading there are financial instruments that never result in anyone taking physical metal. Shanghai is a delivery market. When a contract settles there, real bars change hands. If the global silver story really were demand is collapsing, the metal is overpriced, there's no reason a delivery-based market would be paying more for it while a paper market marks it down. That gap isn't supposed to exist if the bearish paper market story is the whole truth. It exists because it isn't, and the vault data backs this up in a way that's hard to wave away.
CME Group's own daily warehouse reports show COMEX registered silver, the metal immediately available for delivery against a futures contract, sitting in roughly the 82 to 86 million ounce range as of the most recent verified figures in mid-June. That's down from somewhere around 190 million ounces at the 2024 peak, a decline of more than half in about 2 years. I want to flag something here directly. Some commentary and AI-generated content has circulated a figure closer to 42 million ounces for today's registered total. CPM Group's Jeffrey Christian has publicly identified that specific number as wrong. Anyone can check CME's own published data and see the real number is closer to double that. If a video gives you a precise stat, you should be able to verify it in 2 minutes against the primary source. That's the standard I'm holding myself to right here.
Against that registered pool, open interest in the front month July contract has been running in the tens of thousands of contracts, each one representing 5,000 oz, with first notice day landing within days. Independent trackers have been pricing the coverage ratio across the broader COMEX silver book at somewhere around 15 to 16% with implied paper leverage near 6 to 1. That means in aggregate, for every dollar of paper claims on silver floating around this market, there's roughly 15 to 16 cents of registered metal actually sitting there ready to be delivered. I'm not telling you that's a default waiting to happen. Most contracts settle financially every single month exactly as they always have. But sit with the contradiction. The price is being marked down hardest in the same window that registered inventory has been cut in half, and the physical market on the other side of the planet is paying a premium to get its hands on the metal. That is not what a market collapsing on weak fundamentals looks like. That's two different signals running side by side, and historically, when paper and physical diverge this sharply for this long, physical eventually pulls the paper price back toward it, not the other way around.
The deficit that doesn't care what the Fed does today. Step outside this week entirely because the structural backdrop hasn't moved an inch. The Silver Institute's most recent World Silver Survey points to 2026 marking the sixth consecutive year the global silver market has run a physical deficit with this year's shortfall estimated near 46 million troy ounces. Total demand, industrial investment jewelry, has now outpaced total mine supply and recycling for six straight years running. That gap has been plugged by drawing down above stockpiles. And those stockpiles, as the vault data above shows, are visibly thinner than they were 2 years ago.
The demand side of that deficit is overwhelmingly industrial, not speculative. Solar manufacturing alone consumes a meaningful share of total annual mine production, with global installation capacity continuing to expand year over year. Electric vehicles use multiples of the silver content of a conventional car. Add semiconductor fabrication, 5G infrastructure buildout, and medical electronics, and you have demand that simply does not pause because Kevin Warsh sounded hawkish in a press conference. A solar fabricator with a panel order to fill doesn't check CME FedWatch before placing it.
To be fair to the skeptics, higher prices earlier this year did change some behavior. When silver pushed into the '90s, manufacturers running thin margins began thinning the silver paste per solar cell. A real, documented thrifting effect the Silver Institute itself has acknowledged is a modest drag on 2026 fabrication demand. That's a legitimate point, but even with that thrifting underway, the deficit hasn't closed, and registered inventory keeps falling. The structural pressure and the price-driven substitution are both real, and both happening at once, which is exactly why this market keeps producing such violent swings in both directions.
What institutions are targeting while retail panics. Here's the number that should make anyone considering selling into this crash pause before doing it. Major bank year-end forecast for silver, even after some institutions trim their numbers in response to the hawkish Fed pivot, have generally clustered well above where the metal is trading this morning, with several research desks still pointing toward levels in the $70 to $85 range by year-end. On the gold side, targets from major banks have ranged from the high $4,000 to over $6,000 by late 2026, even with some institutions revising lower this month. None of those institutions revised their structural thesis because the dollar hit a 13-month high this week. What changed is how aggressively short-term paper markets are discounting non-yielding assets right now, not the underlying deficit, the industrial demand growth, or the supply constraint those targets are built on.
The gold-silver ratio deserves the same context. At 60:1, with gold unchanged near $4,000, silver would be worth roughly $67. At 50:1, it would be worth $80. Neither calculation requires gold to move a single cent, only the ratio to revert toward where it has spent most of the last century. And history is fairly blunt about what happens after this ratio stretches this far. In March 2020, during the COVID crash, the ratio spiked above 120, and silver subsequently rallied more than 300% over the following several years. In 2008, the ratio pushed near 80, and silver ran from single digits into the high 40s over the years that followed. The pattern isn't a guarantee, but it is consistent. When silver gets this historically cheap relative to gold, it has not stayed that way.
The honest bear case, because you deserve both sides. I'm not going to leave out the argument against everything I just said, because that's not what this channel does. The skeptics' case is real. A persistent Shanghai premium has existed before without immediately forcing a COMEX reversal. Sometimes the gap simply narrows quietly as Chinese demand cools or supply catches up, with no dramatic snapback in the western price at all. COMEX, for all its paper market quirks, remains the dominant global price discovery venue, and that's not changing because one premium widened for a few weeks. And silver is genuinely one of the most volatile assets in the entire commodities complex. Double-digit weekly swings in either direction are normal, not exceptional. And reading too much certainty into any single indicator, including the Shanghai premium, carries real risk.
It's also true that if the Fed actually delivers multiple hikes this year, and that scenario has gained real traction in market pricing over the past week, silver has further room to fall on the paper side, no matter what's happening in China. A persistently strong dollar and rising real yields are genuine, durable headwinds, and they don't resolve themselves just because a structural deficit exists somewhere underneath them. Technically, the chart is broken in the short term, and pretending otherwise would be dishonest. A further leg down toward the low 50s is a real possibility if today's PCE print comes in hot and the dollar extends its move.
All of that is fair, and I'd be lying to you if I said the near-term path was obviously up. But notice what the entire bear case rests on: positioning, rate expectations, and chart momentum. None of it explains away a documented 6-year deficit, a vault drawdown of more than half in 2 years, or a physical market on the other side of the planet bidding the metal up while the futures market marks it down. Paper repositions in an afternoon, ore in the ground does not.
What today's PCE print actually decides within the hour, the number this whole market has been waiting for lands, and here's exactly how to read it without overreacting either way. If core PCE prints at or above the roughly 3.3 to 3.4% consensus, expect the September hike odds to harden further, the dollar to extend its move, and silver to stay under the same pressure it's faced all week. A test of the low 50s wouldn't be surprising on a genuinely hot surprise. If it prints meaningfully cooler, closer to 3% or below, that's the scenario where the rate hike narrative loses force, the dollar gives back ground, and silver could see a sharp relief move back toward the mid-60s simply because the inputs driving the systematic model-based selling flip in the other direction. A number roughly in line with consensus likely keeps both metals chopping in the same range they've been stuck in, with the Shanghai premium remaining the more interesting story regardless of which way the headline number breaks.
One thing worth understanding, regardless of the outcome, this release measures May, a month when oil was still elevated from the earlier stretch of tension before the more recent peace framework brought prices down. That makes today's numbers somewhat backward-looking by construction. A hot print doesn't automatically mean June and July stay hot. It may simply confirm energy costs that already happened. The market's reaction in the next few hours will tell you whether traders treat it that way or treat it as a fresh signal for what the Fed has to do next.
What to actually watch from here? If you want to track this without getting lost in every daily headline, there are really four numbers worth following. One, the Shanghai premium itself, tracked against the live COMEX price by several free dashboards. Watch the direction, widening or narrowing, more than any single day's reading. Two, CME Group's daily registered silver warehouse report. A continued decline in registered ounces while open interest stays elevated tells you the paper-physical gap is getting worse, not better. Three, the weekly CFTC Commitments of Traders report released every Friday. When managed money net long positioning gets flushed to very low or negative levels while commercial shorts get covered, that combination has historically marked turning points in this exact market. Four, the dollar index. It's the single mechanical engine behind most of this week's weakness. When it stalls and reverses, the most powerful headwind currently sitting on silver starts to lift.
Closing. So, here's where this actually leaves us. Silver has crashed 53% from its January peak, and every short-term force, the Fed, the dollar, the peace dividend unwind, quarter-end flows, and a broken chart, is real and pointing the same direction right now. That part of the story is not exaggerated, but the part almost nobody is putting next to that crash is this. The market where silver actually has to be delivered is paying more for it, not less. The vaults backing the paper price have been drawn down by more than half in 2 years. The structural deficit that's run for six straight years hasn't gone anywhere, and every major bank forecast still sits well above where the metal is trading this morning. That's the surprise sitting underneath this crash, not a guarantee of what happens next, but a genuine divergence between what the paper price is saying and what the physical market is doing about it.
I'm not a financial advisor, and nothing in this video is a recommendation to buy or sell anything. Every figure here came from CME Group's published warehouse data, the Silver Institute's World Silver Survey, Federal Reserve and CFTC public releases, and Shanghai Gold Exchange pricing as of this morning, June 25th, 2026. Verify it yourself before acting on any of it. These numbers move by the hour, and today's PCE release in particular could shift several of them within minutes of landing. If breaking this down without the hype is useful to you, subscribe, because I'll be tracking the PCE reaction, the vault data, and the Shanghai premium all week. Tell me in the comments which side of this you're on. Do you think the paper price or the physical price is closer to right, and I'll see you in the next one. This video is for educational and informational purposes only and does not constitute financial, investment, or tax advice. Markets involve risk, including loss of principal. Verify all figures independently before making any financial decision.