Remember the Hunt Brothers? No, not the guys who make ketchup – these were three Texas oil heirs who in 1979 decided to basically buy all the silver in the world. And honestly? They almost pulled it off.
Here’s the thing about commodities markets: they’re built on a gentleman’s agreement that nobody actually wants the physical stuff. Most silver futures contracts get rolled over into new contracts because, let’s face it, who wants 100 million ounces of silver cluttering up their garage?
The Hunt Brothers called everyone’s bluff. They bought 100 million ounces of actual silver bars AND another 150 million ounces in futures contracts. Suddenly, traders realized there wasn’t enough physical silver to go around if everyone actually wanted their metal. Panic ensued. Silver shot up 713% to $49.45 per ounce before regulators stepped in to break up the party.
Fast forward to October 2025, and we’re seeing Silver Squeeze 2.0 – except this time, it’s not three rich guys causing chaos. It’s actual supply and demand fundamentals, which is way scarier if you’re betting against silver.
What’s Actually Happening
Picture this: traders are literally booking airline seats to fly silver bars from the U.S. to London because there’s not enough metal to go around. ETF managers are turning away new money because they can’t find silver to buy. As one hedge fund manager put it, “I have seen nothing like it ever.”
The silver-to-gold ratio (fancy speak for “how cheap is silver compared to gold”) is sitting at 1.25%. Historically, when this number drops below 1.27%, silver tends to go absolutely bonkers. We’re talking 60% gains, 370% rockets, even a casual doubling here and there.
The AI Connection Nobody Talks About
Here’s where it gets interesting: AI is about to eat the world, and it’s hungry for silver. Why? Because silver conducts electricity better than any other metal – even better than copper – and it keeps that superpower even when you shrink it down to microscopic sizes.
Every AI chip, every data center, every solar panel feeding the AI revolution needs silver. The International Energy Agency says AI power demand will double by 2030. That’s a lot of silver-hungry tech.
Meanwhile, most silver comes as a byproduct of mining other metals. Miners don’t just decide to dig up more silver because prices are high – they’re usually after lead, zinc, or copper, and silver just tags along for the ride.
The Bottom Line
Unlike the Hunt Brothers’ manufactured squeeze, this shortage has real legs. We’re in year five of supply deficits, India can’t make enough silverware for Diwali, and AI is just getting started.
Silver hit 45-year highs this month, and the fundamentals suggest this isn’t just a flash in the pan. Sometimes the “poor man’s gold” has its day in the sun – and with AI driving unprecedented demand while supply stays tight, silver might just be getting warmed up.
Just remember: past performance doesn’t guarantee future results, but when supply and demand get this out of whack, interesting things tend to happen.