Published: Friday, October 10, 2025 · 3:39 PM | Updated: Friday, October 10, 2025 · 3:39 PM
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This article first appeared on GuruFocus.
Silver has surged past the $50 mark for the first time in decades, a stunning move that has reignited memories of the Hunt brothers’ historic squeeze in 1980. Analysts say the metal’s 70% rise this year has been powered by an accelerating debasement trade, as investors shift from major currencies toward hard assets such as Bitcoin (BTC-USD), gold, and silver. Demand for safe havens has been fueled by fears of widening US fiscal deficits, inflation risks, and concerns about the Federal Reserve’s long-term independence. With this surge, silver has now outperformed gold’s record-breaking rally, positioning itself once again as the market’s most volatile, yet alluring, inflation hedge.
Behind the scenes, traders are facing one of the tightest physical silver markets in years. In London, borrowing costs have jumped sharply as available metal supplies have dried up, with much of the stock tied up in exchange-traded funds and unavailable for open trade. Analysts at Peel Hunt noted that the conversation around currency debasement has reignited investor enthusiasm in precious metals to a degree rarely seen since the AI-driven equity boom. Meanwhile, the industrial side of the marketfrom solar panels to wind turbinescontinues to soak up demand, widening the deficit for the fifth straight year.
Market veterans, however, warn that silver’s historical volatility remains. Philip Newman of Metals Focus believes persistent supply shortfalls will take time to fully play out in prices, while others caution that sentiment may be running ahead of fundamentals. Even with its latest surge, silver’s inflation-adjusted price still sits well below its 1980 high. But the tone of the market has shifted: after years of currency erosion and policy uncertainty, silver’s comeback could mark a broader turning point in how investors think about real assets in an age of financial excess.
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