You’re probably sick of us writing about silver (chemical symbol: Ag), but we’d be remiss if we didn’t. The devil’s metal is too ripe to resist.

My friend and colleague, Chris Campbell, posted a peach of a piece titled “99 Ways Silver Could Break the Charts” on August 15th. You may have read it in this weekend’s Daily Reckoning. I’ve written about either gold or silver no less than ten times since June 1st.

But since Jay Powell’s dovish speech at Jackson Hole on Friday, you could almost feel the optimism in the air for silver. The X-verse lit up like a Christmas tree for silver after Powell’s remarks, which seemed to open the way to higher inflation. And higher inflation means higher metals prices.

Let’s be clear: if The Donald gets his way, and it looks like he has, the Fed will surely cut rates in September. And that may be just the start.

This is why I’ve never agreed with the thesis “The Fed doesn’t matter right now.”

It’s undoubtedly true that repo rates (where banks trade collateralized loans) are higher than the current Fed Funds rate (the rate at which banks trade unsecured loans), and the liquidity is therefore with the repo market.

But over 85% of all Treasury yield curve moves are parallel in nature. In short, that means President Trump has to get Chairman Powell to lower the Fed Funds rate to get the rest of the curve, including the all-important 10-year yield (a proxy for mortgage rates), down to a level where the USG can refinance its debt.

It seems like Powell is on board, though reluctantly, because lowering rates when the stock market, gold, and Bitcoin are at or near all-time highs seems insane. Surely inflation will light up again.

But that’ll be asset price inflation, and that’s far less harmful, on the surface anyway, than consumer price inflation. In fact, if the plan works, The Donald can simultaneously claim credit for lower mortgage rates and higher prices for stocks, gold, and Bitcoin. A nice trick, even if it only kicks the can down the road some more.

But let’s get to the tweets that are more bullish than ever on silver.

1. The Saudi Central Bank bought SLV.

Incredible. As I was sipping my morning coffee on Saturday, I almost fell out of my chair when I saw this one.

We know that central banks have led the way in buying gold over the past few years as a hedge against the dollar and to avoid buying USTs that lost over 40% from 2020 to 2024.

What if they lead the way again, but with silver? Russia’s central bank was the first to buy silver, but one can always claim they’re outside the dollar system and they’re just securing some supply.

But the Saudis? Have they just admitted that silver’s money in our brave new world?

The only issue is that SLV shares cannot be directly redeemed for physical silver. Ownership gives them price exposure and liquidity, but not direct access to the actual metal. Still…

2. Silver had a massive technical breakout.

That’s a half-day chart of silver, and it’s a clear breakout. Investors this week are looking for a follow-through. For me, a clear break above $39.10 would confirm the rally.

3. The Miners broke out against gold.

This tweet is more about gold, but as silver may be rising faster than gold in the short term, it applies. The miners are usually woeful against the metals, but every once in a while, they massively outperform. If so, our little portfolio of gold and silver miners should take off. Though I’m happy to admit my worst performing miner (FVL.TO) is up over 28%.

4. The Gold/Silver Ratio may be cooling off.

The gold/silver ratio has been out of whack for a while now.

According to annual mining production, it should be only 8:1. Historically, it was between 8 and 10. For the 20th century, it averaged 47.

During COVID, it reached an asinine 125. Now it’s about 86 and falling.

If this continues, silver may rise if only to get things back to where they were.

5. Silver Went Into Backwardation (Briefly)

Let me reprint the rest of @honzacern1’s tweet:

Today, silver markets flashed a rare and important signal. The spot price of silver briefly traded at $39.31, while the September 2025 futures contract stood lower at $38.99. Under normal circumstances, the opposite should be true — futures are usually priced higher than spot.

This standard situation is called contango. Futures typically cost more than spot because they include additional expenses: storage, insurance, and financing costs. Investors are willing to pay a premium to lock in delivery in the future.

When spot rises above futures, however, the market has entered backwardation. This is not a trivial anomaly. It indicates that immediate physical demand for silver is stronger than the willingness of traders to buy paper promises of future delivery. In other words, the market is signaling stress: physical inventories are tight, and those who need silver prefer to pay more today rather than wait for later.

Backwardation is often a warning. It suggests supply strains, rising demand for physical delivery, and distrust in paper markets. For silver stackers, it reinforces a simple truth: paper contracts can be manipulated, but physical shortages cannot be hidden forever.

As the global financial system grows more fragile, episodes like today’s serve as reminders. Contango is normal. Backwardation is a signal. And in precious metals, signals matter.

As a former futures broker, I can confirm the above is correct.

Bonus: Chinese Numerology says so!

As a foreigner who lived in Asia for 13 years, you can’t believe how superstitious the Chinese are!

Wrap Up

Everyone’s excited about silver. If you’re already in, just enjoy the ride. If not, I’d get in as soon as possible, as the window may be closing soon.

Have a great week ahead!