This isn't a simple correction. I've been following this for a couple of months and there's a lot going on. I suspect this isn't over. It's noteworthy that the year 1980 because that was when the Hunt brothers tried to corner the silver market. It's often used as an example of the market correcting itself. It's actually a better example of how the exchanges broke the Hunt brothers to bail out the banks.
The key event that caused the collapse is sometimes called Silver Thursday [1]. The exchange changed the liquidity rules, forcing a margin call the Hunt brothers couldn't make, forcing a selloff. This was arguably to bail out banks with large short positions in silver.
Well, pretty much the exact same thing happened this week when COMEX massively increased the margin requirements [2]. It's worth noting that the market is in a state called "backwardation" where the spot prices are higher than future prices. Refiners aren't buying silver, even at the inflated spot price, because of price risk. But also, the COMEX spot price is increasingly being viewed as "fake" because foreign exchanges are paying significantly more for physical silver thna the paper COMEX price [3].
Basically, this whole thing looks like another GameStop ie a short squeeze. There's not enouugh physical silver to meet contract demands. There's like 300oz of futures silver contracts per 1oz of physical silver.
If you followed the original GameStop short squeeze, the price tumbled there too but didn't solve the short squeeze. You even have exchanges closing people's options positions (eg RobinHood) despite them being in the money.
Banks still need to cover their significant short positions and it really looks like the exchanges are trying to crash the silver market to do it.
[1]: https://en.wikipedia.org/wiki/Silver_Thursday
[2]: https://www.bloomberg.com/news/articles/2026-01-28/cme-raise...
[3]: https://seekingalpha.com/article/4861917-why-silver-prices-i...
The key event that caused the collapse is sometimes called Silver Thursday [1]. The exchange changed the liquidity rules, forcing a margin call the Hunt brothers couldn't make, forcing a selloff. This was arguably to bail out banks with large short positions in silver.
Well, pretty much the exact same thing happened this week when COMEX massively increased the margin requirements [2]. It's worth noting that the market is in a state called "backwardation" where the spot prices are higher than future prices. Refiners aren't buying silver, even at the inflated spot price, because of price risk. But also, the COMEX spot price is increasingly being viewed as "fake" because foreign exchanges are paying significantly more for physical silver thna the paper COMEX price [3].
Basically, this whole thing looks like another GameStop ie a short squeeze. There's not enouugh physical silver to meet contract demands. There's like 300oz of futures silver contracts per 1oz of physical silver.
If you followed the original GameStop short squeeze, the price tumbled there too but didn't solve the short squeeze. You even have exchanges closing people's options positions (eg RobinHood) despite them being in the money.
Banks still need to cover their significant short positions and it really looks like the exchanges are trying to crash the silver market to do it.
[1]: https://en.wikipedia.org/wiki/Silver_Thursday
[2]: https://www.bloomberg.com/news/articles/2026-01-28/cme-raise...
[3]: https://seekingalpha.com/article/4861917-why-silver-prices-i...