Welcome back to The Deep Dive. Today, we are
wrestling with, well, a high stakes financial
mystery that played out just a few days ago.
The date is November 28th, 2025. And silver prices
didn't just move, they exploded. We saw the metal
surge to a nominal record high, settling near
$55 an ounce after touching peaks around $56.
But here's the massive, just bizarre context
for all of this. This record was set at the same
time as a catastrophic, totally unexpected trading
halt at the Chicago Mercantile Exchange, the
CME. It's the perfect market paradox, isn't it?
Yeah. You have this true decade spanning technical
breakout happening at the exact moment the infrastructure
that supports 90 % of global derivatives trading
just went dark. Yeah. So our mission in this
deep dive is to look past that dramatic technical
failure and really figure out what was driving
the price. I mean, was the CME halt the cause
of the surge or was it just a distraction from
these far deeper structural forces that have
been building for years? Exactly. We're diving
into a stack of market analysis and some proprietary
research focused on precious metals, looking
at everything from technical chart patterns to
fundamental supply deficits and crucially, historical
context. And just to set the scene, for you right
away, we have to talk about the huge disparity
in global pricing. As spot prices were consolidating
near $55 here in the U .S., rates in India were
equivalent to, what, roughly $33 .50 an ounce.
That represents a 21 % monthly surge in Asia.
Wow. It tells you immediately that the real action
is happening in the physical metal, not just
the paper contracts. That kind of disparity is
highly unusual. And it's our first big clue.
So it points to a physical tightness. A real
strain on available inventory that the paper
price just isn't fully capturing yet. OK, let's
start with the drama, the charts, the mechanical
breakdown. The initial excitement was purely
technical. Oh, absolutely. Silver broke out above
its prior all time nominal high. which were sitting
around $53, $54 an ounce. It jumped over 3 %
in that session. For chartists, this was the
moment they'd been waiting for. And what's fascinating
here is the sheer conviction. I mean, this wasn't
some weak spike. The price blew past those previous
highs with really strong backing from its support
systems. You mean the moving averages? Specifically,
the 10 -day and 50 -day moving averages were
trailing right below, providing a floor. That
suggests the momentum had really deep roots.
And here's where it gets, I think, really interesting
for anyone who studies long -term patterns. Our
source material points out that this breakout
completed a massive technical formation, a 45
-year cup and handle pattern. That's right, a
45 -year formation. Can you just break that down
for our listeners who aren't traders? 45 years
sounds insane. It is. So imagine a big U -shaped
curve on a chart. That's the cup. It represents
this long period of decline, followed by a full
recovery back to the original peak. And then
the handle is just a small consolidation zone
right before the breakout. 45 years to form that
kind of structure suggests we're seeing a permanent
historical shift in the market's valuation, not
just some temporary spike. And if we needed more
confirmation, the gold -silver ratio fell decisively
below 77 to 1 during this rally. And a ratio
falling below 77 is a massive signal. It means
it takes fewer than 77 ounces of silver to buy
one ounce of gold. Historically, whenever silver
starts closing that gap aggressively, it means
silver is gaining its own independent strength.
It's confirming its own bull market. Exactly.
Ahead of gold. OK, so you have this elegant technical
picture. Now let's contrast that with the real
time mess. The failure at the CME. It wasn't
a cyber attack. It wasn't manipulation. It was
a literal cooling failure. That's the official
story. And it is a bit embarrassing for an institution
that big. The halt struck at 9 .44 p .m. Eastern
on November 27th. The failure was at the Cyrusone
data center in Illinois, which hosts the Globex
platform. And the reason? Overheating servers.
Overheating. Because a facility designed for
2015 data loads just couldn't handle 2025 processing
demands. It almost sounds like a metaphor for
our infrastructure in general, honestly. It really
does. So this cooling failure caused a complete
halt of 90 % of global derivatives trading. And
while traders are just sitting there staring
at blank screens, wondering if this is a financial
crisis, the market kept moving. Oh, wait, hold
on. If 90 % of derivatives trading was halted,
couldn't you argue the price surge was just some
low -volume frenzy that the CME normally buffers
out? That's a really important question. It gets
to market psychology. But the evidence is pretty
definitive because of the global nature of metals
trading. During the time the CME was paused,
markets like Shanghai and the over -the -counter
OTC market, they kept going. And crucially, Silver
hit its absolute peak of $56 .41, specifically
in that OTC and Shanghai trading. So while the
paper market was literally crashing, the price
was still surging in physical locations. Precisely.
The halt was like a perfect stress test for the
price momentum. It proved the underlying will
to buy was global and structural, and it wasn't
dependent on one broken exchange. So if the surge
wasn't a fluke, then we have to shift gears and
talk fundamentals. The real why behind all this
we talk a lot about silver as a monetary metal,
but its foundation today is industrial Absolutely.
We have to remember that industrial applications
are now about 50 % of all silver consumption
This isn't just a shiny metal anymore. It's a
critical component in the biggest growth sectors
of the global economy Let's break that down.
What specific non -negotiable applications are
driving that 50 %? Well, the list is growing,
but the big hitters are solar photovoltaics,
advanced electronics, electric vehicles, the
EVs, and increasingly complex medical devices.
Let's talk about solar for a second. Sure. Silver
is the most conductive and reflective material
known to man. So when you need to capture and
transfer electricity in a solar panel for say
two decades, you can't just swap it out for copper
or aluminum without a huge loss of efficiency.
So that demand is inelastic. Completely. The
global push to transition to clean energy means
we need astronomical amounts of silver. And that's
just the industrial side. We know investment
demand is adding fuel to the fire. It is. We've
seen exchange -traded product, the ETP inflows,
that's metal hold by funds, reach 95 million
ounces recently. That reflects some safe haven
demand, but the investment volume is really just
reacting to the structural problem. And what
is that core structural problem? The supply deficit.
And stress the word deficit. This isn't a single
year shortage. We are now in a multi -year deficit
situation that is persistent. It's long running,
exceeding seven years now by some counts. We're
just consuming more than we're pulling out of
the ground. That's the bottom line. Yeah. And
on the supply side, the constraints are severe.
Mine production is flat, maybe even declining
because of high operating costs. And recycling
efforts, you know, taking silver from old electronics.
They just can't fill the gap. So you have this
high tech inelastic demand paired with stagnant
costly supply. That sounds like a fundamental
crisis. And you can see that crisis when you
look at the stockpiles. Inventory levels on the
major exchanges, ComEx and London, they're sounding
alarms. They've hit historical lows. And that's
what's driving those physical premiums in Asia.
Exactly. It underscores the huge disparity between
the paper price and the actual metal available
for delivery. The physical market is undeniably
tight. It sounds less like a temporary bubble
and more like the market is finally waking up
to a severe multi -year physical imbalance. That
is the essential conclusion from the data. Yes.
OK, let's unpack some history because this whole
situation feels. intensely familiar. This isn't
the first time Silver has had a dramatic late
year breakout. We have to compare this to the
infamous Silver mania from what, nearly 46 years
ago. The echoes are striking. In late November
1979, Silver had this massive surge going from
about $6 to $17 .50 an ounce. It aligns perfectly
with the timing of this current breakout. And
that 1979 surge was the one that ultimately peaked
at $50 in January of 1980. That's the one. And
the response from the exchanges back then was
immediate panic. They started raising margins.
Repeatedly. They implemented position limits,
used liquidation -only rules, anything to stop
the runaway market. And we're seeing the same
playbook now. CME has raised silver and gold
futures margins by five to nine percent multiple
times since September. But if we want a true
honest perspective on how big this $56 high actually
is, we have to talk about what that $50 peak
from 1980 means today. This is the aha moment
for any investor. When we adjust that $50 peak
from 1980 for the growth in the M2 money supply
and GDP, that peak equates to over $500 today.
Over $500? That is a jarring number. For listeners
who aren't familiar, why is M2 the right metric,
not just consumer inflation? That's a great question.
Simple inflation, like CPI, just measures the
cost of goods. But M2 money supply measures the
total amount of money available in the economy.
Cash, deposits, all of it. This is the total
monetary base. Right. And since 1980, that base
has expanded massively. Using M2 gives you a
truer sense of the dollar's relative purchasing
power. It quantifies the erosion of the fiat
currency itself. So what you're saying is, despite
setting a new nominal record at $56, silver isn't
even close to the real monetary ceiling it hit
nearly half a century ago. Not even in the same
ballpark. It confirms that this current run is
being driven by industrial demand and real shortages,
not the pure speculative monetary euphoria that
we saw in 1980. And speaking of that speculation,
there's a vital difference in market structure
today, isn't there? Yes. In 1979, the market
was dominated by concentrated positions, the
famous Hunt Brothers. That made it easier for
regulators to step in and break the speculation.
There was a clear target. A very clear target.
Today, the market lacks a single dominant player.
It's fragmented across global exchanges, Shanghai,
Comex, India. That dilutes the effect of any
single regulatory action. It makes global momentum
much, much harder to stop. And the U .S. government
now designating silver as a critical mineral?
That adds another layer that didn't exist in
79. That designation is huge. It signals that
silver is essential to domestic industry and
national defense. It shifts its profile from
just a monetary hedge to a strategic necessity.
It makes the supply deficit a matter of national
economic security. It does. So what does this
all mean in the bigger picture? How are professional
analysts interpreting this sudden jump? Is it
inflation fears, an industrial boom, or just
technical euphoria? Well, if we look at the broader
context, precious metals are obviously influenced
by macro factors. Fed policy, inflation, geopolitics.
A softening dollar supports commodities, and
that's part of the tailwind we're seeing. And
what are the specific expert takeaways on this
November surge? The experts in our sources are
heavily leaning toward fundamentals over the
noise. Mike Maloney, for example, he highlighted
the monetary signals, the long -term currency
devaluation, and he dismissed the CME glitch
as just market theater. Right. Similarly, Ben
Rickert pointed to the trend of fiat erosion,
which aligns perfectly with those Silver Institute
deficit forecasts. They're all basically saying
the fundamentals finally caught up to the charts.
But we always need a balanced view. What are
the potential headwinds? What could possibly
slow this down? There are always risks. First,
if recycling efforts can become significantly
more efficient, that could ease some supply pressure
over time. Hasn't happened yet, but it's possible.
Okay. Second, and a broughed global economic
slowdown would curb industrial demand. Fewer
solar panels, fewer EVs that would remove that
critical 50 % support base. And from a technical
trader's perspective, what level are they watching
to signal a reversal? Any sustained technical
breakdown below the 50 -day moving average, that
would be a major red flag. For now, the momentum
is holding, but traders are watching that level
obsessively. So this deep dive shows pretty definitively
that the record high wasn't caused by the CME
failure. The failure actually proved the underlying
strength. The surge was driven by fundamental
supply deficits projected for a fifth straight
year now and this incredible industrial demand
from solar and EVs. The CME halt was a major
disruption, but it just confirmed the momentum
was global. It wasn't confined to one paper exchange.
It confirmed the structural drivers are now overriding
the volatility we usually see from paper trading.
The price is finally reflecting a true physical
shortage. And that leads us to a final provocative
thought. The source materials clearly show the
1980 silver peak is equivalent to over $500 today.
So considering that context, and the fact we
now have a globally fragmented market with persistent
structural deficits and silver is a critical
industrial mineral, are regulatory margin adjustments,
these small 5 % to 9 % hikes, are they truly
enough to contain the momentum at this time?
When you have a critical industrial necessity
that is also a monetary metal and the physical
supply is dwindling, you create a perfect storm.
The question really is, what does that dual roll
of silver mean for its long -term volatility
and its eventual price ceiling in a world that
is starved for supply? Something for you to mull
over as you watch the charts and the news over
the coming weeks. Thank you for joining us for
the deep dive.