Silver Mania

 

For years I’ve held 500 shares of ishares Silver trust (SLV) in my investment portfolio. During that time it usually hovered around $20 a share and did little else. I’m not sure why I held on to it. It never paid a dividend or provided any income. Perhaps I thought it would be a haven if all else went to hell.

But in the last 12 months things changed. I checked one day and found that last October, the share price had jumped to around $50, a gain of about 150%. I have always believed that when any asset goes up that far and that fast, it is time to sell and take profits. I don’t like to be greedy. So, I sold 400 shares and netted about $20,000. But for some reason I held on to 100 shares.

Incredibly, the price of metals like gold and silver continued to soar, and by January of 2026, my SLV shares had jumped to $105 per share. I sold my remaining shares at what now looks like a top and netted over $10,000. 

I don’t know who bought my shares that day. Millions of SLV shares were being traded every day in January. The volume indicates that major investment firms were involved. Many of these entities use sophisticated computer programs in decision making.

Then, weeks before the USA attacked Iranian military sites on February 28, gold and silver prices started to drop causing speculative buyers to take big losses. On March 24, SLV closed around $64 a share, down about 40% from the January high. That’s big money. Of course, the shares are still considerably higher than they were last March, but if you bought in January, you took a big loss.

I’m trying to understand what this precious metal mania meant for ordinary people. As the price of gold and silver soared, it obviously took more dollars to buy an ounce of each metal. That means that as gold and silver prices rose, the dollar weakened and had an inflationary effect. It just took more pieces of paper to buy an ounce of gold and silver, or anything else. Now that metal prices have dropped, does that mean the dollar is stronger, and will that impact inflation figures?

Unfortunately, I could find little information or interest in the movement of gold and silver prices in the pages of the Wall Street Journal, or various media outlets over the past year. So, I can only guess about what happened. I certainly don’t want to try to predict what will happen going forward.

Was it just a speculative mania or “bubble” that finally burst in January? Or perhaps the meteoric rise was caused by investors who feared that President Trump was not bluffing about Venezuela and Iran and who were seeking what is normally a safe haven for their money. 

Despite the rise in precious metal prices, inflation moderated and oil prices stayed relatively stable. Only after the attack on the Iranian military sites on February 28 did oil prices spike.  Even though energy prices are not included in official inflation figures, ordinary people are feeling the effect at the pump.

During the past year major stock indices continued to rise to record levels, and people would have seen substantial increases in their 401k and other investment accounts.  The Dow Jones Average and other market averages hit all-time highs in early February but began to drop a few weeks before the attack on Iran.

Everyone knows that real estate prices have risen over the past year. A quick check on Zillow indicates that my modest home has reached an all-time high value. But like most people, if my wife and I wanted to cash in, where would we go?

Most people don’t consider that their homes fluctuate in value like stocks and precious metals but maybe it doesn’t matter. At least we can live in our homes no matter what the value.

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