Silver prices are going a bit crazy. In half a year, the gold-silver ratio has dropped from 90 to 57, and this pace is clearly abnormal.

I remember when the ratio was at 35, I was already bullish on silver, with very solid reasons—at that time, the gold-silver ratio was as high as 90, which was definitely abnormal, and silver should have caught up with gold's gains. But what happened? In just six months, silver prices soared to over 80, and now it's at 57. To put it in numbers, by 2025, silver is expected to increase by as much as 170%, while gold has only risen 70%, which is already crazy—silver has more than doubled.

From a historical perspective, the gold-silver ratio fluctuating between 40 and 80 is considered normal. But modern society is different; silver is no longer a currency, and its financial attributes are far inferior to gold. So, the situation of a 40-something ratio in ancient times is definitely not going to return. The current high-level oscillation around 70-80 is basically the ceiling.

Why is this happening? Simply put, investment momentum is too strong. Some big capital is promoting the "industrial shortage narrative," with industries like photovoltaics, new energy vehicles, and AI chips all using silver, while silver production is limited. This should be something the industrial sector figures out themselves—by switching to copper or seeking substitutes—but the hype-driven capital doesn't care about that. In just six months, they have turned the market upside down, causing industrial companies to panic.

The most interesting part is that some are spreading rumors that China is restricting silver exports, predicting the silver price could surge to $100 or even $300. This is just a tactic to stir up hype. In reality, China consumes 60% of the world's industrial silver, so raising silver prices is not beneficial to itself. China can produce 60-70% of the refined silver globally, but it’s impossible to do so just for speculation and profit.

On the other hand, China would prefer to see metal prices stabilize and is more willing to build sufficient strategic reserves. Remember the nickel price spike in 2022? It surged 250% in two days, reaching an extreme of $100,000 per ton, causing the London Metal Exchange to halt trading for 8 days, and was later resolved through an agreement. The short squeeze was on China’s Qingshan Industrial, which was mining nickel in Indonesia, with a peak unrealized loss of over $15 billion. Although the trading agreement was later canceled, they still lost over a billion. Since then, China has stockpiled enough nickel, and speculators can no longer manipulate the market—this is a harsh warning to all capital trying to speculate on commodities.

Therefore, I believe China’s controls on silver exports are mainly aimed at establishing industrial reserves and preventing excessive speculation. The current silver price at $78 has already gone too high, and a short-term sharp correction is inevitable.

The exchanges also don’t want to see excessive surges, so measures like raising margin requirements will likely be implemented. Investment funds are also starting to differentiate—some are considering whether to cash out their positions. So, silver is already showing signs of topping and oscillating.

Another variable that cannot be ignored is that the US previously announced tariffs on silver, but companies rushed to import, which led to a decline in London silver inventories, further pushing up silver prices. But if the US ultimately decides not to impose tariffs, the imported silver will flow back into London inventories, and as inventories increase, a sharp decline is basically on the horizon.