For this week’s commodities check-in on the HotCopper Wire, hosts Isaac McIntyre and Jonathon Davidson came back to silver – the gold-tied “meme trade” that went vertical in January – to find it stuck at six-month lows, shrugging off the Iran ceasefire, and now moving in near-lockstep with Bitcoin.
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The pair had flagged silver months ago as a “meme trade” riding gold’s coattails before the Middle East war thematic took over. This time, McIntyre said, it looks terminal. “It feels like it’s more formally dead and buried this month,” he said.
The price history is brutal. McIntyre walked through it: Back in January, silver went vertical, smashed the US$100/oz mark and printed an all-time high just below US$122, before it “fell out of bed” with a 30-odd percent crash in a single session, and has been slowly and surely leaking all the way back down since.
This week, the precious metal sank to six-month lows, and “even talks around the Iran ceasefire did pretty little,” McIntyre added. “It all feels pretty dead now.”
Davidson’s sympathies were with the latecomers. “Spare a thought for anybody who bought at the top,” he said, noting silver had hit 6M lows this week and gold 7M lows, now below US$4,000. Like so many meme trades before, “the moment’s passed, the juice just isn’t as forthcoming.” His read on the tape: “We’ve had a real lack of motion, we’re stuck in park, but that’s better than being stuck in reverse.”
The ASX names told the same story. As of Wednesday’s close, Davidson ran through the field: Silver Mines was down -45% year-to-date; Andean looked healthier on the one-year chart but was still off nearly -20%; and Investigator was showing “a classic pump and dump style chart,” lower by more than -65% over the same period. Mithril Silver and Gold was down more than -60%, and so on.
“I think it’s fair to say the silver hype of recent yore well and truly over for now, and for the foreseeable future,” Davidson said. If gold starts to “agitate upwards” again, he reckoned, silver would follow it to a point – but first it has to “break out of this meme trade association, which now kind of taints it,” he said.
That association, he argued, has a new face: Bitcoin. Davidson had lined up the three-month charts for the two the night before recording. “You can set your watch to that chart,” he said – a correlated line that is “pretty much identical if you squint.” The warning that he added was against reading too much into it.
“So, is Bitcoin a silver indicator or silver a BTC indicator? Neither,” he said. “Probably, the silver meme trade sucked some gas out of Bitcoin.”
McIntyre then chalked it up to the same crowd chasing the same thematics: “Eager traders piling into the big trades while they’re booming.” The open question, he added on the podcast, is “whether any of them return once the cycle comes back around to Bitcoin, silver, and some of those other bullish trades.”
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