Silver Price Outlook: A COMEX Default Could Push Prices Above $200

Looming COMEX Silver Crisis

In a detailed video update, Clive Thompson explains how the COMEX could run out of deliverable silver as early as March. As of February 4, the exchange reportedly holds just 103 million ounces of registered silver available for delivery, while open interest stands at approximately 429 million ounces.

If 25% of those open contracts demand physical delivery, the COMEX could theoretically face a default. Even if the exchange manages to get through March without issue, there is a strong possibility that delivery pressures could resurface in May or July.

This leads me to believe that a failure to deliver physical silver could be the catalyst that drives prices sharply higher, potentially above $200 per ounce by summer.

Gold’s 1979 Mid-Cycle Pullback

In the chart below, I’ve overlaid (in white) the multi-year advance in gold leading into the 1980 peak. Note that the vertical rise was interrupted by a one-month mid-cycle pullback (yellow circle) before the final rally into a blow-off top. The trend and structure of gold’s late-1970s advance are very similar to the current move, which suggests this may be another mid-cycle pullback before new highs in Q2. If correct, prices could resume the uptrend in March and push towards $8,000 by April or May.

Silver Miners to Silver Ratio

Below is a great chart from Tavi Costa: The silver miners (SIL) to silver (SLV) ratio is near one of the lowest levels in history. Not long ago, investors were simply hoping to see silver trade above $50/oz. Today, prices are well beyond that level, while some producers are operating at sub-$15/oz costs. Take away: silver miners are still a bargain and could have a lot more upside going forward.

Source: https://x.com/TaviCosta/status/2018440401460563980/photo/1

Our Gold Cycle Indicator remains overbought at 450.

GOLD: Gold has formed a swing high after a brief rebound. During the 1979 mid-cycle pullback, prices initially bounced, then drifted back to fresh lows before turning higher. A similar outcome today could see prices stair-step lower toward $4,300 into month-end, followed by a surge to new all-time highs in April or May. A sustained breakdown below $4,300 would imply that a more significant correction is unfolding.

SILVER: Silver collapsed, finishing well below the 50-day EMA. I would like to see prices hold (on a closing basis) support between $69.00 and $70.00. Sustained closes below that level would invite an immediate retest of the $50.00–$55.00 breakout, where soaring physical demand would likely put a floor under prices. A COMEX default in March or May could trigger a surge to $200+.

PLATINUM: Platinum finished below $2,000, and the next level of support arrives near $1,750 and the October high.

GDX: Miners are breaking the cycle trendline, which typically happens before a bottom. As long as prices hold support around $84.50, I'm looking for more upside in Q2.

GDXJ: Juniors closed below their cycle trendline, and we could see a bottom within the next 1 to 2 weeks. I'd like to see price hold support near $110.

SILJ: Silver juniors finished below their trendline, confirming a cycle top. I'd like to see price hold support between $26.00 and $27.00.

BITCOIN: Bitcoin has broken support at $75,000, sending prices into freefall and marking the worst one-day selloff since November 2022. We are now in the heart of the bear market, and the few remaining bulls are beginning to capitulate. Overall, I don’t expect a final bottom until October. What happens between now and then is difficult to predict, but we can reasonably expect one or two sharp snap-back rallies along the way. My target remains $40,000 (± $5,000).

Closing Thoughts

Margin increases and excess leverage triggered last week’s selloff in metals, but the charts suggest an even more explosive rally could follow—similar to 1979–1980. A supply crunch or an outright default in COMEX deliverable silver in March or May could serve as the catalyst that propels prices above $200 in Q2.

In the near term, prices are likely to consolidate sideways to lower into month-end, before resuming their uptrends in March. A final blow-off move in gold could drive prices toward $8,000+ before a more sustained pullback takes hold. Currently our work supports a final top sometime in May.

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