Happy Thanksgiving, GoldBuzzers - wherever you are in the world!

Silver's up almost 10% this month and 75% this year. Time to talk about why 2026 could be even bigger.

Let's dive in.

Gold Glitters Near Two-Week Peak

Gold flexed its muscles on Wednesday, closing around $4,163 per ounce - its best showing in almost two weeks - as Fed rate cut fever gripped the markets once again. The shiny stuff got a serious boost from markets pricing in an 83-85% chance of a December rate cut, up from just 50% last week. That's what happens when the economic data comes in softer than a marshmallow in hot chocolate.

Kevin Hassett emerging as the frontrunner for the next Fed chair added extra juice to the rally - the guy's basically said he'd be "cutting rates right now" if he had Powell's job. Meanwhile, today's mixed bag of data - with jobless claims surprising lower but durable goods orders cooling - kept traders convinced we're heading for easier policy. The dollar took a breather from its recent highs, making gold more attractive for international buyers.

On the geopolitical front, progress on Ukraine peace talks took some of the safe-haven urgency off the table, capping gold's upside potential. But hey, with Deutsche Bank now calling for $4,450 per ounce in 2026, the bulls aren't complaining. As we head into Thanksgiving holiday (markets closed), gold's sitting pretty and ready to feast on whatever breadcrumbs the Fed drops next.

As we close out 2025, the precious metals market is putting on quite a show. Gold has pushed past $4,150 per ounce - up roughly 60% this year. But the real story might be silver, which has quietly climbed above $53 and is now flirting with levels not seen since the Hunt Brothers saga of 1980.

One thing I always keen an eye on is the gold-to-silver ratio, which has compressed from above 100:1 earlier this year down to around 80:1. That's still well above the historical average of 50-60:1, which suggests silver has significant room to run - even after its impressive 2025 gains.

Let me walk you through why the setup for silver in 2026 looks compelling, and how investors can think about positioning.

According to the Silver Institute's latest data, we're now in the fifth consecutive year of structural supply deficits in the silver market. The numbers tell the story: global silver demand is running around 1.12 billion ounces annually, while mined supply sits at approximately 813 million ounces - roughly flat year-over-year.

What's eating up all that silver? Industrial applications account for about 665 million ounces, with solar panels, electric vehicles, and electronics driving persistent demand. The green energy transition isn't slowing down – if anything, it's accelerating.

Meanwhile, exchange-traded product holdings are up roughly 18% year-to-date. That's institutional and retail money steadily accumulating positions throughout this rally.

When demand consistently exceeds supply, inventories draw down. And when inventories get tight enough, prices tend to move - sometimes violently.

Several factors are converging to support precious metals broadly, and silver in particular.

Fed policy: Markets are pricing in December rate cuts. Lower rates reduce the opportunity cost of holding non-yielding assets.

Dollar weakness: The dollar index has drifted toward the high-90s, providing a tailwind for dollar-denominated commodities.

Central bank buying: We've covered this extensively, including in The Gold Awakening, central banks are on pace for their fourth consecutive year of 1,000+ tonne gold purchases. This structural demand supports the entire precious metals complex.

Those of us who remember the 2008-2011 cycle know how quickly silver can move once it gets going. Back then, silver went from $9 to $49, a 444% gain, in less than three years, ultimately outpacing gold's 171% rise.

What's different this time is the green energy component. Solar alone is projected to consume 20-30% of global silver production by 2030. That's demand that didn't exist at scale during the last bull market.

I wouldn't be doing my job if I didn't address the risks.

Silver remains notoriously volatile - $1-2 intraday swings are normal. Analysts are watching $49-51 as near-term support and current levels around $53 as resistance. Breaks on either side could trigger momentum-driven moves.

A stronger-than-expected economy could push the Fed toward a more hawkish stance, boosting real rates and the dollar. That's historically negative for precious metals.

Industrial demand could soften if we hit a recession. While silver's safe-haven bid might offset some of that, the industrial component (about 60% of total demand) matters.

And frankly, after a 75%+ year-over-year gain, a meaningful correction wouldn't be surprising. That's just how markets work.

If you're primarily a gold investor – as many GoldBuzzers are – here's how to think about silver exposure:

The ratio trade: With the gold-silver ratio at 80:1 versus a historical average of 50-60:1, some investors are swapping a portion of gold holdings for silver, betting on mean reversion. It's a way to stay long precious metals while tilting toward the metal with more catch-up potential.

Mining leverage: Silver miners offer amplified exposure to price moves. If silver doubles from here, quality miners could see 300-500% gains due to operational leverage. But be selective – management quality and balance sheet strength matter enormously. See my recent analysis of SIL and SILJ.

Physical accumulation: Silver's lower price point ($53 vs gold at $4,163) makes regular accumulation more accessible.

ETF exposure: SLV and PSLV offer liquid exposure without storage considerations.

Silver's supply-demand fundamentals are tight. The macro backdrop is supportive. The ratio versus gold suggests relative undervaluation. And industrial demand from green energy provides a structural growth driver that didn't exist in previous cycles.

Does that guarantee $100 silver? Of course not - nothing is guaranteed in markets. But the setup is about as favorable as I've seen since completing the Theseus research project. The key findings from that work suggested systematic approaches outperform precisely because they help investors stay positioned through the volatility that inevitably comes with bull markets.

And make no mistake: there will be volatility. Silver doesn't go up in a straight line. Corrections of 15-20% are normal, even in powerful bull markets. The investors who capture the full move are typically those who sized their positions appropriately from the start - small enough to hold through drawdowns, large enough to matter when the move plays out.

History doesn't repeat, but it often rhymes. The last time we saw this confluence of factors - supply deficits, monetary accommodation, industrial demand surge, and a stretched gold-silver ratio - silver went parabolic. Those who positioned early made generational wealth. Those who waited for "certainty" bought the top.

As we head into 2026, if you're sitting on a gold-heavy portfolio, ignoring silver's setup could be leaving serious money on the table. Even a modest 5-10% allocation could significantly boost returns if this thesis plays out.

The clock is ticking. Industrial users are already scrambling to secure supply. ETF holdings are climbing. Central banks are hoarding precious metals like it's 1971. And the gold-silver ratio is still telling us silver is cheap.

In markets, you rarely get this many green lights flashing simultaneously. When you do, the question isn't whether to act - it's whether you'll look back in two years and wish you'd acted bigger.

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

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com