facebook
back to top
Monthly Wrap Up

Can Silver Really Go Higher or Is It Stuck?

Bob Tompson about prices of gold

In this hard-hitting interview, precious metals expert David Morgan exposes how the COMEX and paper silver contracts are distorting true silver prices — leaving retail investors misled and market fundamentals ignored. From the gold-silver ratio sitting at historic extremes to the manipulation of physical delivery through cash settlements, David breaks down the critical problems behind the scenes. Learn why physical silver remains the only real hedge, and what the massive global vault movements could mean for the future.

 

Why Silver Is Lagging Despite Bullish Sentiment

Greetings once again from Sprott Money, SprottMoney.com. We've reached the end of May, 2025, and it's time for your monthly wrap up. I'm your host, Craig Hemke. Joining us today to discuss primarily silver, because it's all causing us to pull our hair out, is a guy who still has a lot of his hair, David Morgan. David pretty much devoted his entire life to that shiny metal. And we have him to thank for a lot of the hard work that's done to get us to this point. He is the publisher of the Morgan Report, and I can't wait to pick his brain a little bit. David, good to see you, my friend.

“Well, that’s the last part first. I think it’ll break out to the upside, but it is worrisome,” Morgan said about the narrow trading range silver has been stuck in, while gold prices have surged. “When we see the gold silver ratio above 100, it's usually what I would call an anomaly… now if you outline, Craig, it's been going on for some weeks.” Morgan pointed out that the current dislocation between gold and silver prices contradicts historical patterns, referring to Jim Dines' theory that major moves should be confirmed by both metals. “If we do see a catch up where the gold-silver ratio shortens… that's obviously confirmation,” Morgan emphasized. Despite the puzzling performance, he expressed confidence that “we are moving toward the week we set ever every day,” suggesting that a breakout is imminent.

For current deals on physical silver, check the Sprott Money Spring Sale before May 30. More options can also be found in their section on silver bullion.

 

Gold Spot Price: Silver Derivatives and Paper Pricing

David Morgan didn’t hold back in his critique of the current pricing system for silver, noting that the spot price of silver is not truly reflective of supply and demand fundamentals. “When you see a silver price, you see a derivative price,” he said. He explained that the silver spot price is primarily based on trading in paper contracts rather than physical delivery. “The spot price is pretty much derived from what we call the near month… and that's done by a bunch of paper contracts,” Morgan said. This means the price does not reflect physical scarcity but rather what traders are betting on.

He elaborated on how the futures market is structured to avoid failures in physical delivery. “The COMEX really can't have that problem because… it can make you settle for cash,” Morgan added, referencing cases where brokers have forced smaller investors into cash settlements. “That mitigates having to put physical on the line.” These practices, according to Morgan, make the market “a fiat game for the most part,” since only about 1% of contracts ever result in physical delivery.

 

Buy Gold: Moving Metal and Hidden Forces

When asked about the massive movement of gold and silver from the UK to the US, Morgan provided a layered response. “It did start with tariffs… everyone was worried there would be a tariff on bullion. 25% was the number at the time. So that's exactly what started,” Morgan claimed. After that initial catalyst, other market forces took over. “There’s a pretty good arbitrage between London and New York… that incentivized [the move].” Morgan also hinted at more conspiratorial possibilities involving a shell game of shifting gold between bullion storage locations like West Point and Fort Knox. “I have proof on this. It's probably happened here,” he said.

While he couldn't definitively pinpoint the ultimate reason for the movement, he speculated that it could involve military stockpiling, banking backstops, or future delivery needs. “I think there was those three reasons of why it moved. But what's the ultimate why? I don't know.”

This level of opacity in the precious metals market is concerning for investors. External reports, such as from LBMA, confirm that the amount of silver held in London vaults is dwindling, supporting Morgan’s caution. Monitoring such data is crucial for those planning to buy gold or silver in bulk.

 

Silver Spot Price: Exchange Risk and Physical Flow

Morgan pointed out the shifting dynamics in the COMEX exchange and how physical flows are now revealing more about market health than spot prices. “Most of the silver coming off the COMEX isn't bought for industrial purposes, it's bought for investment purposes,” Morgan said. He underlined that industrial buyers usually avoid futures markets unless in urgent need. “They're going to go to the refiner… that's the way that works,” he added.

He also highlighted how the actual delivery of metal paints a very different picture from the paper market. “When you get to the actual silver flows… it's opaque. It's from refiner to industrial users.” Morgan noted that the investment demand is primarily what moves metal off the COMEX, rather than industrial use. “The whole investment thing is a scam based on a paper derivative,” he said, revealing his strong stance on the current system.

He emphasized that futures markets were originally designed for hedging by producers. “The purpose of these markets was to be able to hedge… but it's been abused for so long that it no longer serves its use of purpose,” he concluded. These insights support the strategy of acquiring physical silver as a hedge against systemic risk and market manipulation. For a deeper dive into physical market insights, visit Sprott Money's blog.

 

Silver Mining Stocks: Signs Of A Turnaround

When it comes to silver miners, Morgan sees a glimmer of hope. “Most of the time, the shares will lead the metal,” he noted. Referring to the recent performance of SILJ, the silver miner ETF, Morgan said, “Silver stocks are starting to catch up to that price,” suggesting a potential turnaround. He advised investors to focus on value rather than price, such as how much oil or wheat an ounce of silver can buy. “You look at the same thing in the price of an ounce of silver versus shares in a premium silver producer.”

Morgan reinforced the importance of starting with physical metals. “If you want to get in this space, you got to buy the physical first,” he stated, recommending it as a foundational, risk-free asset. “That’s private, portable, divisible, all the things of real money.” Only after securing physical silver should one consider silver miners. “If I had anything left to invest, I would start looking at the miners. That’s where the real value,” Morgan concluded.

For further reading on silver mining and investment insights, websites like Mining.com and ETF.com provide in-depth coverage.

 

Invest In Gold And Silver Today

As David Morgan and Craig Hemke underscored throughout this wrap-up, silver remains undervalued relative to gold, and systemic issues in the futures market could lead to significant price revaluation. While gold has already moved higher, silver may be poised for a catch-up rally. With geopolitical risks, financial instability, and opaque market mechanisms, holding physical gold and silver is not only wise—it’s essential.

Contact the Sprott Money team to learn more about gold and silver investments.

 

Craig Hemke (00:00)

Greetings once again from SprottMoney, SprottMoney.com. We've reached the end of May, 2025, and it's time for your monthly wrap up. I'm your host, Craig Hemke. Joining us today to discuss primarily silver, because it's all causing us to pull our hair out, is a guy who still has a lot of his hair, David Morgan. David pretty much devoted his entire life to that shiny metal. And we have him to thank for a lot of the hard work that's done to get us to this point. He is the publisher of the Morgan Report, and I can't wait to pick his brain a little bit. David, good to see you, my friend.

David Morgan (00:54)
Craig, it's great to be with you again. Thank you.

Craig Hemke (00:57)
And before we get started, I'm not sure when you're watching, we're recording this on the 28th. Through Friday the 30th, you can still take part and get some deals at the Sprott Money Spring Sale. It's right there on the homepage. Go to SprottMoney.com. It'll be about the first thing that pops up. Click it, go to that page. You'll find great deals, not only on silver, but gold too. But again, it's listed to only go on until Friday, May the 30th, which means time is short. So go there as soon as you get done listening to this. Of course, just call them. 888-861-0775. Okay, David. As, like I said, as someone who's devoted his life to that white shiny metal, let's talk about a couple of things that driving us all crazy. Let's start with price, because gold is up a significant percentage this year, but silver isn't really even keeping up. And in the last six or seven weeks, man, it's been like in a box, about as tight of a range as I've seen for a protracted lengthy period of time going nowhere. Now that means it also hasn't gone down. Yay. That in itself is kind of a victory sometime, but doesn't seem to be going up either. What are your thoughts on this current range and which way do think it'll break out when it finally does?

David Morgan (02:15)
Well, that's the last part first. I think it'll break out to the upside, but it is worrisome. When we see the gold silver ratio above 100, it's usually what I would call an anomaly and it lasts usually for just a few days. Now if you outline, Craig, it's been going on for some weeks. And one thing that does concern me, I've written about this is the not only the gold silver ratio, you might say the yellow white ratio because you still got platinum palladium, which classically are money. No one thinks of them as money. I'm not saying they are money, but by classical definition of money, they are—they're divisible, fungible, rare, all that stuff. But anyway, Jim Dines had the theory of the... I forget what he called it, but it had to do with the takeoff of the Dow there, that the industrials and transportations had to confirm the utilities or all three. One was going off. Then you had to question what's going on. Can you have industry without an increase in transportation? So, Dines basically said he wanted the confirmation of silver to gold. And obviously we're not seeing that. Now, you know, if we do see a catch up where the gold-silver ratio shortens, it goes from a hundred down to let's say 50 or something—that's obviously confirmation. I'm not saying anything wrong, but it does make you scratch your head. So my thought is we are moving toward the week we set ever every day. We're closer to it. And the banks are using their one, I'll call it most important asset, and that's gold. It's going to free the bond market. It's free for any currency crisis. It's basically the money of last resort for them. They do not use silver as a monetary asset or platinum. So I think it's bank driven more than it's driven by the retail investor. You both know you work with Sprott. I know I talk to most of the big dealers, both domestic and foreign and the retail investors really missing. It's missed a lot of this move in gold. People that hold it are doing fine, but they're not buying more. So I think it has to do with the psychology of what really coming out in the future. Now all the people that you and I have educated over and others, many others, over the last decade or two decades or three decades or in my case, four decades, you know, they bought it 10 years ago, eight years ago, five years ago, 25 years ago, and they bought hopefully the right amount for them. And they're holding it as an asset that's free of all the other assets. It's got no liabilities, no counterparty risk. So I'm being a bit long-winded, Craig, but I would like you to kind of answer your own question because that's kind of the best I could come up with. I wish I could look at you and I'd say, absolutely Craig, it's this because that's what's happened. I don't, it's a fuzzy answer. Do you have any extra thoughts?

Craig Hemke (05:16)
No, I just, I'm befuddled as anybody else. It's maddening. I think I do want to address that gold silver ratio though, because that was another thing on my list to ask you about. Because I see it all the time. I see it at my site. I see it in conversations people are having on Twitter. What, again, we all talk about the historical basis of 12 to 1 or 15 to 1 or whatever. Of course, that's back when, you know, that was before the futures market and derivatives were even, you know, a dream of anyone back when we had that type of ratio. So is this 100 to 1-ish just the reality of the world we live in? Is it a function of how many derivatives there are versus gold derivatives? Why is it so out of whack and why does it persist at these levels?

David Morgan (06:16)
That's a great question. And when you did answer it, I really, when you look at the price—well, the answer is when you see a silver price, you see a derivative price. You see what the spot price is. And the spot price is pretty much derived from what we call the near month, the month that's trading. And that's done by a bunch of paper contracts, as you well know. And the only problem that could occur is a failure to deliver. And the COMEX really can't have that problem because in the contract, if they choose—not you choose—to settle for cash, it can make you settle for cash. And just as a digression, a sidebar, I don't know how many, it's not like hundreds, but you know, probably less than 20, but over the years I've gotten, "Hey David, I went to my broker. I had these two contracts, I wanted delivery and then my broker made me settle for—exchange made me settle for—cash." So how often has that taken place? I don't know. And it's usually smaller guys. I don't know if they do it, you know, bank to bank or whatever, but that's something to consider. So that mitigates having to put physical on the line. Right. And so that mitigates really how much there is. If there is a mismatch, obviously with one contract not delivered that wanted to be, that's a mismatch. Is it 0.01% of the total of that delivery month or that non-delivery month? I don't know. But it does suggest that there's not a complete market in the amount of demand physically that's needed. The other part in the same digression is all of the, what you and I would call manipulation, but if we had to go to court we'd have to call it spoofing, but let's say illegal activity. There was one where it was Morgan Stanley and they were having these silver contracts or over-the-counter contracts. People were buying silver, storing it and getting charged. Well, it actually turned out that there was no vault whatsoever. They were getting charged storage fees and they didn't buy the silver either. They just had like a paper contract against it.

David Morgan (08:41)
But here's what rubs me raw. And this is not a one-off example. It's again and again and again. So the court settles. So what are they settling? Fiat. Now let's think about this. If the court did it by the way I think is fair, you would have to go get that silver and make all those people whole that bought the silver, because that's what they bought. If they wanted fiat, they'd keep the money in the damn bank. But they didn't. They bought silver. So why shouldn't it settle in silver? So remember, I know you know this, that when JP Morgan, that last big fine I remember was 920 billion, remember that? Oh, that's a lot of loot for me anyway. What if they had to go in the market and buy the silver? What would that do to the price of silver? But you play in the silver world and it's like a duality. You say silver, you speak silver, contract silver, but it's a fiat game for the most part. Because only about 1% of the contracts ever actually turn into physical metal. And the problem that could happen is non-deliveries, said a moment ago, but so far, to be fair, most of deliveries that are required are met. But remember when Eric started the silver PSLV, I was sitting in the room and they hadn't blue-skied it for the U.S. and he asked me my opinion. I told him really, you gotta do it for the U.S. So I forget what it took. I'll make up a number. I think it's reasonable four to six weeks longer. They got it done. And that first tranche, if I remember right, was right around 22 million ounces, I think. 24, somewhere in there. And the last set of bars came in brand new. Past delivery due. And I thought, you know, hey, we're at the edge, you know? And we probably were at that exact point in time. But a couple years later or so, he made another tranche, which was slightly more, I think it was like 24. I mean, they had it to him almost the next day. So there is an ebb and flow in all markets, the wheat market or whatever. But I really was kind of thinking, OK, you know, we're in a place now where, you know, they cannot really meet any substantial demand.

Craig Hemke (10:52)
Yeah. Well, all right, let me ask you. Yeah, we've always thought physical delivery, you know, stretching the leverage farther and farther until the rubber band breaks. We always thought that was, you know, kind of the key. And I still think it is. But we've watched the last six months, this massive amounts of metal leave the UK or come from somewhere and cross the pond into the US, not just gold, silver. You know, there's. I've seen reports, people try to figure out what the actual float is of silver in London and incredible people, incredible math say it's under 200 million ounces. And then you got about that much that's flowed into the COMEX over the last six, eight months, you know, from 300 million ounces and all their vaults up to about 500 million now. Record amounts of deliveries or very near record amounts of deliveries with 16,000 contracts back here in May for the May contract or very close to it. What do you make of that? Why is all that metal moving around the planet? Are they band-aiding things? Is it tariff related? What are your thoughts?

David Morgan (12:14)
Well, I'm pretty adamant on some of this. I mean, I've heard people I respect, they use their name. Here's how it went down to absolutely best of my knowledge. It did start with tariffs. Some of them say, no, tariffs have nothing to do with it. Tariffs is what started the ball rolling because these guys did not want to pay at the time. And this has gone back and forth, you know, as fast as Trump changes his underwear. Regardless, you know, when it started, everyone was worried there would be a tariff on bullion. 25% was the number at the time. So that's exactly what started it. I don't care what anyone says. That's what started it. Now, once that started, then other factors started coming into it. The other factor was there's a pretty good arbitrage between London and New York. And because of the arbitrage, that incentivized. So now is it tariffs? No, it's tariffs and arbitrage, or forget the tariffs, it's arbitrage alone, but it went tariffs, arbitrage. Combination thereof. Then after that, now this is more conjecture. It got to be, well, we're going to look at the amount of gold in Fort Knox and we better find some gold and stack it in the shelves real fast so, you know, we can do our shell game because if we audit West Point, we'll move the gold over there. And then after that's audited, take the gold out, we'll move it over to Fort Knox. And after that's audited, we'll take it out and take it to the third place. I'm being a bit facetious. Believe me, this has happened. I have proof on this. It's probably happened here. I know for a fact it's happened in Australia because I was involved with John Adams for a long time when we were investigating a facility down there. So that would be my answer. But why exactly? I don't know. I think there was those three reasons of why it moved. But what's the ultimate why? A military program talking silver more than gold, or do we need it to shore up a bank or a stand for delivery that someone knows is coming in the future? Or I don't know. I don't know that part of it.

David Morgan (14:24)
Yeah, it's a curious bit of math. You know, back when this silver was really cooking and we were at 200,000 contracts of open interest, but only 200 million ounces in the vaults. Yeah. It's like five times the amount of silver that's there registered and eligible. Well now we got about 140,000 contracts. We got 500 million ounces in the vaults. So that's 700 million versus 500 million. Is the exchange deleveraging a little bit? I don't know.

David Morgan (14:55)
I think they are. I think, you know, nothing could hurt them more than a failure to deliver, especially if it's one of their insiders. It's a bank to bank failure to deliver or a COMEX. I mean, industry doesn't buy off a COMEX unless they're really short, you know, need it real quickly. I mean, most of those contracts are with refiners directly. I don't know why would they ship it from London to New York to Philadelphia or they're making over wire. No, they're going to go to the refiner. They're going to ship it to the industry user. And that's the way that works. And I mean, so there's a lot of contracts that are not anything to do with the futures markets. And usually they're based on a weighted average or whatever. In other words, you know, I want to lock it so I'm somehow lock it in a certain price that happens, but usually it's three months, you know, the average price of the three months plus 2% or whatever. But that's an example. It's not exact, but there could be one exactly like that. Anyway, I'm a little drifting off, but the point is there's such a show around the price setting mechanism as Ted Butler taught us for years. But when you get to the actual silver flows of where the physical moves from and to, it's opaque. It's from refiner to industrial users. It's only the guys that buy it for investment purposes that take it off the COMEX and fill up the SLV or the PSLV or Buffett buys it off the COMEX or whatever. But most of the silver coming off the COMEX isn't bought for industrial purposes, it's bought for investment purposes. And the whole investment thing is a scam based on a paper derivative of oats or wheat or corn or—I mean, it's all a fucking paper derivative. I don't know if I can say that word, sorry. I usually don't, but you got me triggered because you and I agree on a lot of things. Not everything. I don't agree with everybody on anything. But the purpose of these markets was to be able to hedge for the producer, which I think is noble. I think it should exist. But it's been abused for so long that it no longer serves its useful purpose. If Trump really wants to do something, you get somebody in the CFTC to right the wrong and start this as you can only short what you produce within a year or within six months or something that's fair. But if you can short infinity, the price is going to zero of anything, not just silver. If you short wheat to infinity, there's 10 planets of wheat waiting to dock for us. Price is worthless.

Craig Hemke (17:30)
Right. But if you get asked to actually deliver the wheat against what you sold forward, there's a whole—then you can't do it. Right. Let me ask you one last question, David, because a lot of the work that you do at the Morgan Report involves, you know, looking at the mining shares and uncovering opportunities. Let's talk about the silver miners, because, man, that has been a—talk about pulling your hair out. However, in the last few days, I noticed on Tuesday the 27th the SILJ, Silver Miner ETF, posted its highest close in over six months. So is there any hope I guess I should say for the silver miners? Are there some that you like? Is this a sector that's about to play catch up?

David Morgan (18:39)
Yeah, that's a great question. And you really triggered me in a way because most of the time, most of the time, the shares will lead the metal. I mean, I learned that from Jim Dines among others. And so you would see these stock—well, why silver, why are silver stocks moving? Silver is just sitting at 33, a hundred to one ratio. Excuse me, it could be that. I actually hope it is that, but you could flip the coin around, look the other side and say, well, silver is, you know, it's at 33, which is higher than it's been in recent past. And therefore silver stocks are starting to catch up to that price. So you could make that argument. I mean, the best way to think of it is what is the value? You always want to look at value. I don't like to look at price, you know, and value is, you know, how much oil does an ounce of gold buy? How many rental properties does 10 ounces of gold buy? How much wheat does a kilo of silver buy? That type of thing. So you look at the same thing in the price of an ounce of silver versus shares in a premium silver producer. And if you want to catch people that bought silver at 10 bucks or lower, that's who you want to buy these miners because that's what they're pricing their silver at, the vis-a-vis share price. And so that's where the real value is. Now I won't go back on my edict that if you want to get in this space, you got to buy the physical first. And I'm not a bullion dealer, but I really believe that you want a risk-free asset or as risk-free as you can get that has no counterparty risk. That's private, portable, divisible, all the things of real money. So that's where you start. But I wouldn't start large on that space. I'd get just enough for a couple months expenses. I had anything left to invest, I would start looking at the miners. That's where the real value is.

Craig Hemke (20:40)
And it's that same conundrum for the ultra wealthy, the mega wealthy like yourself, and then just the peons like me. You have to diversify. At some point, you can't just have everything in one asset class. You get too heavily weighted. And so the ultra wealthy start buying land and art, you know, and everything else that will hold its value or appreciate over time because it's just not simply about stocks and bonds. And that's what we're talking about here. You can diversify and part of your money into things like gold and silver and the rest. David, you've done such great service helping people over the years. Remind everyone about the Morgan Report and where they can find your work, please.

David Morgan (21:26)
Yeah, the best place is just go to the landing page, themorganreport.com and the free newsletter sign-up is right on the top of the page. I do want to mention the documentary SilverSunrise.tv. Yeah, that's kind of stalled out. I've been telling people now for, I don't know, for the last three or four months, I expected to see it by the end of summer and getting in the summer and. Being as discreet as I can and I want to be vague deliberately but the main producer's got some health issues. And so we had a nice chat recently and it looks like I may have to find another editor to finish the whole film. Now all the filming has been done. So that's all in the can. The script is written so three quarters of it's done. But the hardest part of making a documentary like this is taking a clip of when Craig Hemke was interviewed and I asked him, you know, what are the three most important things about Silver? And then we cut out everything else because that fits the narrative and it's the most profound thing he said, and it all works together to produce a great documentary. That's a lot of work. And he's not able to do it right now. So it will be delayed. How much? I don't know. I haven't found anybody yet. I've already interviewed a couple of people that are somewhat interested and all that. I'm not trying to make excuses. I just feel, you know, I mean, you've known me for years. I'm gut honest. We've hit, you know, a bit of a roadblock. We'll be overcome. But as far as duration of the projecting when this thing will be done, I projected based on good health and that no longer exists. So therefore, so I don't want to drone on about it, but that's the fact.

Craig Hemke (23:19)
We will continue to patiently wait for it, because I'm sure it's going to be fantastic, David. And like all your work has been. So thank you so much. Like I said at the beginning, for all you've done over the years, all the people you've educated, I mean, the list is, I mean, it's in the thousands, the hundreds of thousands of people that have benefited from all your hard work. So please keep going. And I very much appreciate you taking some time to visit here at the end of May.

David Morgan (23:23)
Thank you, Craig. Great to be having a chat with you.

Craig Hemke (23:48)
It's always good to see you too, my friend, and from all of us at SprottMoney, SprottMoney.com. Thank you for watching. Please be sure to smash that like or subscribe button on your way out because there's a whole lot of content that's going to be coming at you again next month. You don't want to miss any of it and when you like or subscribe, you get notified when there's new stuff that's out and keeping you up to speed on what's going on with precious metals. Thank you David Morgan. Thank you Sprott Money for the content and thank you all for watching and we'll have more great content for you coming in the month of June.

Don’t miss a golden opportunity.

Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.

About Sprott Money

Specializing in the sale of bullion, bullion storage and precious metals registered investments, there’s a reason Sprott Money is called “The Most Trusted Name in Precious Metals”.

Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.

Learn More
about-sprott-skyline
no comments

Looks like there are no comments yet.