Happy Tuesday, GoldBuzzers!

Silver has given back more than half of its January record, and a lot of you have been asking whether the run is over.

Today’s Take Action Tuesday puts that question to 56 years of silver prices, using a charting idea I borrowed from a platinum analyst.

Ok. Let’s get into it. ⬇️

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Gold steadied around $4,010 an ounce on Monday, a welcome pause after Friday’s slide to a three-month low capped its sharpest weekly fall in more than four months. Silver held just under $54, territory it last saw in November 2025.

The pressure on both comes mostly from oil. Expensive energy has kept inflation uncomfortably warm, and that keeps the Federal Reserve leaning toward higher rates - a drag on metals that pay no interest. Monday brought a little relief, with crude falling for a second straight session as fresh diplomatic efforts to cool US-Iran tensions took some heat out of the inflation picture.

The Fed wraps up its meeting on Wednesday and is widely expected to leave rates alone, though markets put the odds of a December hike near 80 percent, according to CME’s FedWatch tool. Thursday’s PCE inflation report and next week’s midterm elections come next on the calendar.

Until the rate question settles, the consolidation phase is likely to stay choppy - but the floor-building you’re watching now is exactly what these phases look like.

My weeks are pretty busy as you can imagine, so every weekend I try to catch up on the articles and posts I bookmarked during the week. One of the things I read on Sunday was a thread by Australian chartist David Bird, built around a 50-year chart of platinum that I’ve been thinking about a lot.

He drew a line along the top of each long bear market in platinum, sloping down from the peak. Each time the price finally broke through that line, it shot higher and then took a deep fall. Only after that shakeout did the real bull run begin, and it lasted years. He sees it in the 1970s and again in the early 2000s, and he thinks platinum is doing it a third time. Platinum set a record of about $2,920 an ounce in January and has since lost close to half of that, so plenty of people have already written it off.

Silver has had a rough year too, so I decided to draw the same lines on silver’s chart going back to 1970. The fit was even closer than I expected.

Three breakouts, three shakeouts

Silver slid through 1970 and 1971, then broke above its downtrend in July 1972 at about $1.68. It ran to $6.76 by February 1974 and then lost 44 percent in under five months. Anyone who sold at that low missed a run to $49 in January 1980, 13 times higher.

After the 1980 peak, silver spent 21 years in a bear market. It finally broke its downtrend in April 2002 at about $4.64. Two years later it lost a third of its value in five weeks, then climbed to $48 by 2011.

The next bear market lasted nine years. Silver broke out in July 2020 at about $18 and jumped to nearly $30 within a month. It then spent two years falling 40 percent, before going on to a record $116 this January.

Each of the three breakouts was followed by a deep drop, and each drop was followed by much higher prices. The line also did a good job of filtering out false starts. Silver rallied 50 percent in 2016 but never cleared its downtrend, and it went on to a lower low in March 2020.

The drops didn’t stop at one

Silver’s bull markets haven’t been gentle after that first shakeout either. During the 2000s run it fell 35 percent in a single month in 2006 and 57 percent in 2008. It still went on to $48.

Where silver stands now

Last October, silver finally cleared its 1980 high of $49. It more than doubled in under four months and peaked at $116.58 at the end of January. By Friday’s close it had given back 54 percent to $53.88, which leaves it just above that old ceiling.

That’s the shape Bird is pointing to in platinum: a breakout through a line that held for decades, an explosive move, then a deep fall. This drop is deeper than silver’s earlier shakeouts, though close to the 57 percent it lost in 2008.

A fair warning

The same shape also shows up at the very end of a bull market. Silver surged and crashed in 1980 and again in 2011, and both times the crash marked the top for years.

One key difference is worth weighing. Silver rose almost four times in the 12 months before this January’s peak. That’s more than the 2.7 times it gained in the year before the 2011 top, though well short of the eightfold surge into 1980. On the other hand, the bull market that began with the 2020 breakout is five and a half years old, and its peak was 6.5 times the breakout price. The bull markets that ended in 1980 and 2011 each ran seven and a half to nine years and rose 10 to 29 times.

History can’t tell us where the bottom is or how long the wait will be. After each past shakeout, silver took anywhere from 18 months to five years to get back to its previous high.

How to put this to work

Size your silver holding so that a 50 percent drop is something you can sit through. Silver has fallen that far in the middle of a bull market before, and it’s likely to happen again.

Decide now what would make you sell, and write it down. Selling in the middle of a shakeout is how people missed the runs from 1974 to 1980 and from 2004 to 2011.

The big picture

Bird built his case on platinum, but silver has followed the same pattern three times in 50 years. A breakout pulls in new buyers, then a hard drop shakes many of them out before the real run begins. Silver broke a 45-year ceiling last October and is now going through that test. In each of its three earlier breakouts, the people who held through the shakeout ended up owning silver worth many times more.

That’s all for this Tuesday, folks. I’ll see you on Thursday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com