Summa Silver Corp. (TSXV: SSVR, OTC: SSVRF, FRA: 48X)
Silver Lives Here
Although gold prices have repeatedly hit record highs due to central bank accumulation, silver’s safe-haven properties have continued to weaken, causing the gold-silver ratio to approach historically high levels. As industrial demand gradually replaces traditional investment demand to become the dominant factor in the silver market, the trajectories of these two precious metals are diverging more noticeably.
In a recent online seminar on silver, industry leaders and analysts discussed the key drivers influencing the silver market and potential turning points in the future.
In 2024, silver prices climbed from $22 per ounce at the beginning of the year to a high of $35 in October, then continued to fluctuate in the $30–32 range. Market analysis suggests that U.S. President Trump’s tariff policies have exacerbated global financial turbulence, prompting investors to turn to gold and silver as safe havens. However, a deeper shift arises from the change in silver’s demand structure—industrial applications have now surpassed traditional investment demand, with solar panel manufacturing emerging as the largest growth engine.
Eric Sprott, founder of Sprott, pointed out that breakthroughs in solid-state battery technology will drive a revival in the electric vehicle market, while the continued decline in solar power generation costs will further stimulate silver demand. Former Hecla Mining CEO Phil Baker added that although China accounts for 90% of the global industrial use of silver, policies introduced by Indian Prime Minister Modi to promote domestic solar industries could trigger an explosive growth in silver demand in India.
Since silver is a by-product of base metal mining for copper, nickel, and others, its production is subject to fluctuations in these metal markets. Baker emphasized that even if silver prices rise sharply, major copper mining companies are unlikely to adjust their production plans, meaning a supply shortage could become a long-term structural issue. Data shows that the annual market shortfall for silver will reach 120 million ounces.
Technical analyst Michael Oliver noted that over the past year, silver prices have twice tested the $35 resistance level, with patterns similar to the build-up before previous breakthroughs at $26. He believes current momentum indicators suggest a breakthrough is imminent, positing that reaching $36 could form a “triple top breakout” pattern.
With the current gold-silver ratio approaching a historical high of nearly 100:1, Oliver forecasts a reversion to the traditional range of 40–80:1, implying that silver may yield excess returns relative to gold.
Sprott bluntly stated that the silver market has experienced manipulation over half a century and highlighted that major banks on the COMEX hold short positions exceeding 500 million ounces of silver. He revealed unusual price movements during trading sessions: when international markets push silver prices higher, the COMEX often shows an artificial suppression immediately after the opening. However, as silver prices stabilize above $30, it is becoming increasingly difficult to maintain these short positions.
Sprott boldly predicted that silver prices will break through $50, which, when converted using a historical gold-silver ratio of 15:1, translates to a target silver price of over $200 corresponding to current gold prices. Oliver suggested that the first surge could swiftly push prices past $70, noting that a retreat in cryptocurrency speculation and decreased attractiveness of U.S. Treasuries will amplify fund flows into the precious metals market. Although Baker did not provide a specific target price, he pointed out that the current supply-demand fundamentals are at a “unique historical juncture.”
