Silver climbs $1.64 as of the 6:00 pm EST market open on Sunday as demand surges, pushing the price to 6-month highs. Phil Streible, chief market strategist at Blue Line Futures, said that a $40 to $50 target from here for silver is not impossible.
The silver market is seeing a surge in demand as retail investors pile in and bully and dealers are having a hard time meeting demand with the supply prices are surging. As we speak Phil streamboat chief market strategist at BlueLine futures joins us today to discuss Phil it's up a dollar 80 as we speak as of two minutes ago, markets opened, um, what's your initial reaction?
What we're seeing here is that individuals are targeting these high beta high, short interest product products. Like what we saw happened last week with GameStop and all those small cap stocks, they moved over to the silver market. And what they're trying to do is a short supply squeeze and thrust prices higher given everything that's been happy right now, were you expecting prices to move even higher on the open.
You it's incredible what a, you know, an army of people that are locked and loaded with the funds that they've received from last week, shifting over to silver, I really expect, you know, a three to $5 move higher. And this is only the night's session. The Sunday night session, once mainstream gets going and the eight 30 open that's when people are going to start targeting those silver miners, the SLV, some of the other physical backed ETFs.
And that's what I think prices continue to move higher. Yeah. So how are you trading this market right now? So what we did, it was rebuilt call calculate a risk call, spreads that many of our clients have on. We were expecting some kind of disconnect between gold and silver. Um, just naturally because of the fact that.
The supply of silver has been pretty much stagnant. The demand is continuing to increase everything from electronic to solar demand. So we were looking for silver prices to go up anyways this year, this is just the tailwind and it's been really. You know what a blessing that came out of nowhere and we could see you don't move back to those 2011 highs where we've punched up to $50 an ounce, the miners at all, uh, at the mod nine 30 open field, because remember a couple of days ago, same thing happened not at this scale, but we saw first majestic silver.
Uh, we can precious metals and a few others. They all moved up at least 10%. Uh, silver moved up about 10% that day as well. So, uh, people might see stocks as a leverage to what's happening right now with the silver market. Yeah, definitely. They believe that in a lot of those silver miners do have high sport interest, then also.
You know, for people. When did you start looking at call options and an inexpensive way? Not everybody can afford to speculate silver futures where it's a 5,000 ounce contract. The total value of it is about $135,000. So if someone did want to take delivery of it, Which that's what a lot of people are talking about.
You already saw the ate up all the available supply. So all your coins, your smaller bullion numbers, those have all been really taken off the market. No, one's got any available. So people have to look at other opportunities. I don't think that they're going to start to be able to. You know, started buying these $5,000 contracts started taking delivery of them unless they've got the capital to do it.
So their other option is look at call spreads, look at going long. Some of these junior miners where they could give them a great deal of leverage. Okay. Why do you think they were shorter than the first place Phil? Short on the, on the futures or on the minor, the miners will both like, I guess it's, maybe it's a similar story of maybe a different story.
What do you think when you go into the depth of a minor? Okay. And I'm not talking just like silver miners, you start looking at gold miners. The reason why a lot of people have been shorting them. Is because, and they break it down to a steepening yield curve. So the two year note has been flat. The 10 year the yield has continued to increase gold generally does not perform well in a higher, um, you know, when you see those yield curve, steepening gold does not perform well, if you back-tested.
So I think that's part of the thing is that also Gold's a currency where silver as a company. I think that, um, silver really you're seeing that demand pickup. You're seeing the people are identifying it as a, an easy target to push higher. And we're seeing that follow through right now. I've been writing for, for months, how, you know, silver is going to leave golden a dust, and finally we're having it.
I think it's really a good blessing. And you could see it. Um, firsthand by looking at the gold silver ratio. That leads me to my next question. You're a medium term outlook. Now you've been, like you said, you have been liking silver for quite a, quite a while. I remember her last name to the useless silver with lead gold this year.
First of all, do you still hold that view given what's happening now in second, what do you think is going to happen to gold now in response? So, I mean, just looking at the price action from the open, silver up about, you know, anywhere from about a dollar 50 on October $2 and gold futures had not responded in the same way.
You know, what I'd really like to see is them start targeting platinum palladium. Those are even rarer metals. You know, if you start going aggressively going after platinum, that could, that one, you know, I saw people writing silver could go to a thousand, realistically platinum, I think has a better shack on the 2000.
Yeah. Yeah. Okay. Now what they're doing now with silver, is it more or less difficult to do that with gold? A much bigger market? I would imagine it's harder, right? Gold is controlled by the central banks. Um, gold production P the uses of gold, just aren't there, people buy gold and then they store it.
Silver is actually, you know, no one really goes out in mind, specifically for silver. What they do is that it's a by-product for every, like one ounce of gold. That's mine. You'll get about eight ounces of silver or, you know, it's a tailings from the copper mine. So there's a lot less silver out there.
There's increasing demand for it. And you're just going to see that supply demand continue to get squeezed. And I really, you know, I think that this is a great opportunity for people to continue to come in and add at these levels because silver hasn't broke it out to 30, 40 or $50. Okay. Um, you know, it's interesting, I'm looking at the after hours trading GME is down after hours, about 4%.
Do you think people are moving out of GameStop into some of these other things? Definitely going to be a secular rotation out of it. And I think really where this started, and I could be wrong on this, but I think that a lot of this community that is targeting silver right now, they were the original people, the original investors in Bitcoin, and some of the cryptocurrencies, there were also part of that Tesla movement.
We saw those products go up, they started to stall out. And if you look these, you know, the way growth and inflation are accelerating. The funds all being short, all of these underperforming stocks, if you're going to go out and you're going to move your money out of, out of Tesla and out of Bitcoin, and you want to put it somewhere, you're not going to be buying Apple and all these other stocks at 52 week highs, she looked for an opportunity and.
You know, stop AMC. Some of these small retailers heavily short in high beta is, is it's a, if you're short, then it's a path for disaster coming into higher growth, higher inflation. So they caught that move up. Now they're looking to exploit other opportunities. I think silver fell on their radar and it couldn't be a better time to be involved in with commodities myself.
Okay. So what happens next? Phil? Are you updating your price target for silver given what's happening right now? Yeah, realistically, I thought $35 would be the high end, but I think that, you know, once a week the movement gets going, you know, 40, $50 is completely likely. What we have to look at is how the number of candidates tracks that are created does open interest, continue to expand greatly.
And also how much delivery is going to take place off of the, off of the exchange. So if all that occurs. Prices. There's really no telling. I mean, once, you know, I've seen other exchanges where they actually physically run out of a product, whatever it is, you know, we've seen it in like the London metals exchange, and then they've got to do a force measure.
They come up with a price and they settle everyone in cash. So, you know, there's no real telling if they get into that situation, you could see triple digit silver, but realistically, we're going to start looking and seeing how this, how it all plays out. Okay. Final question. Now as a trader, um, We talked about this going in, but given your price outlook, are you just going to keep it open your long position?
Are you going to put any stops, key levels? You're looking out for the next 48 hours, how you play. I definitely want to see it get over this previous high that we saw back in August, you know, we've got to get over 29, 50, $30. If we get above there, there's probably heavy stop-losses there. That would also be a breakout on the chart.
If you zoom in the chart, you look at, you know, this last year and a half, you could see it's formed at bull flag. We break out to the upside. We'll probably be targeting those 2011 highs. Perfect. Thank you very much, Phil, for coming on such short notice and uh, happy trading and the next day. Yeah, thanks for having me.
Thank you for watching Keiko news. I'm David Linn. .