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Silver closed at $94 oz. on Tuesday (1/20/2026). Momentum could take it right through $100 and higher. Projections of $120, $500, and even $1000 oz. are plentiful. And, of course, we are told that the fundamentals indicate and support such lofty projections. But, do they? 

Only a couple of weeks ago, silver was closer to $70 oz. At that time, I posed a question to my friend at Chatgpt: 

"How much of a factor is pure price speculation in the higher silver price increase from $30 to $70+ vs. real fundamentals? In other words, do real fundamentals justify current price of $70+ and predictions of $100 or more? Please be specific when using percentages and price levels." 

Here is the complete answer I received... 

1) How much of the $30 → $70+ move is speculation vs. fundamentals?

- Speculation / financial flows: 60–70%
- Fundamentals (supply–demand): 30–40%

2) What do fundamentals alone justify?

Fundamental “fair value” range (today)...

• $35–$45 per ounce

This assumes:

• Persistent but manageable mine supply deficits

• Strong industrial demand (solar, electronics, EVs)

• Moderate monetary debasement hedging demand

• No widespread investment panic or currency crisis

At $35–$45, silver is already pricing in:

• Structural supply tightness

• Above-trend industrial growth

• Long-term monetary risk premiums

3) What drives prices above fundamental value?

From $45 → $70+

This zone is dominated by speculation, driven by:

• Momentum traders & CTA trend-following

• Leverage in futures/options

• Retail FOMO narratives

• Gold/silver ratio mean-reversion trades

• Inflation & currency-collapse hedging psychology

Estimated breakdown at $70:

• ~$25–$30 speculative premium

• ~$40 fundamental base

4) Do fundamentals justify $70 silver?

No — not on their own.

At $70:

• Silver is priced ~55–75% above fundamental value

• Requires continued speculative inflows to sustain

• Becomes extremely sensitive to:

  • Dollar strength

  • Rising real yields

  • Margin changes

  • Risk-off events

5) Do fundamentals justify $100 silver?

Absolutely not — fundamentals alone cap out near $45–$50.

$100 silver requires:

• 80–85% speculative component

• Monetary or financial stress narrative

• Loss of confidence in fiat or bond markets

• Possible derivatives or physical delivery stress

$100 is a monetary event price, not a supply-demand price. 

SUMMARY AND CONCLUSION

According to ChatGPT, silver is adequately priced at $45-50 oz - based on the fundamentals as outlined in its response above. A silver price above $45-50 is primarily generated by speculation. 

Without that speculation, the price of silver likely cannot stay this high for very long. 

The monetary and financial stress narrative is there, and so is the physical delivery stress, BUT...

We have seen that before. And it did not keep the silver price elevated at such an extreme level for very long. 

Exactly 46 years ago (January 1980), silver peaked at $49 oz., helped along by heightend inflation concerns and a failed attempt to corner and control the silver markets. At peak ownership, the Hunt brothers controlled about 70 percent of the worlds physical supply of silver and continued to take delivery of the metal rather than sell or roll over their expiring contracts. 

Within two months of its January 1980 top, silver was down to $10 oz., a decline of 80 percent. A similar percentage decline from $100 (or thereabouts) could take silver down to $20 oz. 

That may sound preposterous, but not entirely so. We already have higher margin requirements for futures contracts, higher bond yields, the potential for a stronger U.S. dollar, and huge liquidity concerns in the financial markets. Any one-off financial crisis event will more likely be oriented towards the destruction of asset prices, all assets. 

Silver topped at just under $50 oz. in 1980, and again in 2011. ChatGPT says that $45-50 oz reflects full fundamental value. I would not be surprised to see it go beyond $100. Likewise, I would not be surprised to see it drop back to $50 oz. very quickly. 

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