Q&A with Ted Butler, Senior Advisor, The Silver Advisor, and Co-founder & Senior Analyst, Sound Money Report
Silver analyst Ted Butler says that the recent 50% price correction since January 2026 represents a generational bottom. He points to structural supply deficits, depleted inventories, strong industrial demand, and the prospect of renewed US investment as factors positioning silver for a major rebound.
Despite seasonal weakness and rate-hike fears, Butler expects inflation, tightening supply, and renewed investor interest to drive silver and silver equities sharply higher into late 2026.
To listen to the interview, click here:
Let’s start with an introduction to your work in the industry.
I’ve been writing about silver for the last four years now as an analyst of not only the silver market but silver mining stocks.
I write for the In Gold we Trust report, which is Ronald-Peter Stoeferle’s publication that’s been going for 20 years. I write for the Silver Advisor publication with Peter Krauth, who is famous for his bullishness on silver, having written the book on silver, The Great Silver Bull.
I also write more broadly about macroeconomics and mining as it relates to gold, lithium, copper, and other commodities.
What do you see as the major macro themes currently shaping investor appetite for silver?
I think we’ve had this material sell-off since the peak in January 2026. And a few investors are concerned whether silver is going to rediscover its momentum again or when it will begin its next phase upwards.
My answer to that question is, yes it will. I actually think we’re very close to the bottoming process completing itself. I think that around the US$50 ($71) level is quite a hard line. In other words, it could serve as a springboard for silver’s next leg up.
A lot of the speculation that drove silver to US$121 in January 2026 has left the market. So now we’ve got resolute investors who are really willing to hold silver in the long run — who appreciate that not only is silver undervalued now but that the fundamentals are still in place.
Essentially, this is the same story that we saw six months ago. It’s just that the market has recalibrated its sentiment toward silver.
Relative to gold, you needed 45 silver ounces to buy just one ounce of gold at the bottom of the cycle when silver peaked in January. Today, you need 70 ounces of silver. In other words, silver has become cheaper relative to gold.
And if you look at the historical averages of the gold-silver ratio going back to 1971, it’s around 60 ounces. If you go back to 1900, it’s around 50 ounces. So, on a historical basis, silver is becoming cheap again.
The fundamentals haven’t necessarily changed. We’re still in an era of consecutive supply deficits.
That’s forcing the lack of mine production, the lack of recycling to meet the demands, and it’s forcing the industrial players to erode inventories of secondary supply, which is basically the LBMA in London, the Shanghai Futures Exchange in China, and the CME’s COMEX.
So, as long as that dependence on secondary supplies exists, the fundamentals for silver will continue to be supportive going forward.
What has created this situation where silver is undervalued? Is now a good time for investors to take note and get involved in the industry?
It is absolutely a great time. Simply from the perspective of buying the metal, it’s 50% cheaper than it was six months ago for the same thing.
A lot of people might have bought at the top and are now thinking that they might be sitting on losses. I don’t want to encourage people to double down, but for those who missed the boat last year when silver was at US$30, this is a gimme.
This is another generational opportunity. The fact that silver has come all the way to do what it is now. I didn’t think it would actually fall so sharply. I thought that it would stabilise around US$60 or $70, and yet it has come even deeper.
I’m framing this as an opportunity because I see that these deficits are going to continue, and, ultimately, that’s amazing for silver mining stocks.
When you think that, in 2025, the all-in sustaining cost (AISC) for a primary silver mine was around US$12. Since then, we’ve had inflationary costs, and with the oil shocks and broader geopolitical uncertainty, let’s say the AISC stays at around US$20.
Even at a US$57 silver price at it is now, that’s more than a 50–60% profit margin, which rivals the likes of the best blue chip companies you can think of.
These margins would be the envy of any CEO, yet the market is refusing to acknowledge it. I think that disconnect presents a real opportunity for contrarian investors like myself who appreciate value and are intent on chasing momentum like so many people do nowadays with tech stocks.
Why do you think there is this disparity between market opportunities and what investors are seeing and acting upon?
I think a lot of this is just the summer doldrums. This is a seasonal weakness that is characteristic of the silver market, the gold market, and, just more broadly in the summer over here in North America, people go on holiday. So I think it has kind of been overblown.
Of course, I think what happened in January was that there was so much speculation, so much froth in the market. And, ultimately, that can only go on for so long.
We were basically parabolic at one point. Silver was going up in a straight line and that can never continue. So, I think markets always find a way to recalibrate.
I think in terms of why, perhaps people have allocated to tech stocks, or whatever other areas of the market. But it doesn’t change the underlying fundamentals, which is that this is an unbelievable opportunity right now for silver investors.
You mentioned the growing supply deficit in silver at the moment. We know that the demand story — especially from the industrial side — is growing significantly. Do you see that persisting in the long term?
I actually do. The data that I use is the World Silver Survey by the Silver Institute and Metals Focus. It’s the go-to publication when it comes to silver supply and demand.
If you look at the market balance, what people regard as the structural supply deficit has been shrinking over the last few years. In other words, it was more than 200 million ounces three or four years ago, and now it’s around 40 million ounces this year. So, it’s definitely not as pronounced as it was.
When you look at the next item in the column in the table, this is what’s called the silver market balance, including exchange traded product (ETP) demand. That’s the investment in ETPs for every given year. And in 2025, that hit a new record at the highest it’s ever been.
If you account for the net ETP investments, the deficit was 318 million ounces as opposed to 40 million ounces when you just look at the structural deficit.
These are two different numbers, but it does show that actually one of the main reasons for silver’s explosion in 2025 and 2026 in January was actually ETP demand. In other words, investment drove silver to record highs.
These fundamentals laid the foundations for silver to get to US$50 in October 2025. But actually, it was investment that blew the roof off silver by January 2026. I think that’s an important distinction to make. Actually, the staggering thing for me is that US interest in silver hasn’t really picked up yet despite this.
A lot of this up to now really has been driven by India and Europe. US coin and bar demand is expected to increase 57% in 2026, according to the Silver Institute.
After four years of losses, silver saw demand collapse by 69% from its 2021 peak. So the global cache is forecast to increase 18% to 257 million ounces and has considerable upside to reach the 2022 peak.
There’s another 100 million ounces or so on the table for investment demand to come back into the market. If you think that the structural market balance is around 40 million ounces, that could totally change the game if the US really understands the silver investment case in 2026.
When you look at the macro picture — and the situation with the Federal Reserve and rate hikes — people are getting fearful that Fed Chair Kevin Warsh is actually this hawk and will act as if he’s Paul Volcker from the 1980s, potentially hiking rates to 20%.
We’re living in a different era, though. Warsh doesn’t have the same flexibility or capacity to hike rates to 20%, especially when the US Government debt-to-GDP ratio is 125%.
Back in 1980, it was around 30%, and today, interest payments on the US Government’s debt is its biggest expense — bigger than military spending, bigger than the welfare state.
So, we’re talking about two different eras, and my point is that I don’t buy this idea that Kevin Warsh is going to hike rates. He seems to have convinced the market that he will hike rates, and I think that’s one of the reasons why we’ve seen such a sharp correction in silver.
But, ultimately, he will either hold rates at 3.5–3.75% — as he did this week — or he will be forced to cut. And when he cuts, that will lift the lid on an inflationary monster that is sitting beneath this system.
And, as we know, when inflation is rampant, the precious metals typically outperform due to the investment demand that will be derived from that.
As inflation wreaks havoc on the global economy, investors will seek a safe haven — an asset that protects its purchasing power, like gold and silver — and that could actually bring about that 100 million ounces or more of demand from US investors.
That’s not even considering a resurgence in India, China, and these other countries that have shown a disposition for silver over the last few years.
In this environment of inflation, interest rates, and currency volatility, how do investors see silver? Is it seen as a hedge in the same way as gold?
I always say that silver has this identity crisis. Around 58% of total silver demand comes from the industrial side like solar power, electric vehicle batteries, electronics, photography, etc.
And its monetary metal status has been somewhat watered down over the last three to five decades since we came off the silver standard and since 1971 as well.
So, there is a material difference there, and gold performs more strongly in response to economic and monetary factors. That’s not to say that silver’s monetary metal status is dead. In fact, it very much follows gold and has been doing so with a 0.8 correlation in recent years.
We tend to say that ‘where gold goes, silver follows’, and I still believe that’s true. You can imagine that, as rates are cut, inflation will return, people will flow to gold, and then silver will benefit from that.
Our price target is US$300 silver. For this cycle, that might take another five years to come about, but ultimately, I do believe we’ll see it someday.
What’s your prediction on where the silver market is moving in the near-term?
Over the next few Fed meetings, I think we’re going to see Warsh continue to battle with this dilemma. It’s a prisoner’s dilemma that he’s in. He’s stuck between a rock and a hard place.
If he hikes, he increases the cost of borrowing for the US Government at a time when US Government debt is already 125% of GDP. US$1 trillion every year in interest payments is not sustainable. If he cuts rates — as I think he will ultimately choose — inflation will return.
All of this government spending that Trump’s watching over through these policies that he’s funding — the military spending that we’re seeing as well — will ultimately translate to increases in monetary supply and inflation.
When that happens, that will be beneficial to silver. As a matter of time, before the summer doldrums and the seasonal weakness finishes, silver will begin to rediscover its strength and rediscover its momentum.
I think this summer is actually a generational opportunity for silver investors to buy silver — and not only that but silver mining stocks — which typically have three to five times leverage on the silver price.
I honestly believe that the near-term picture we might have will be a bit more volatility through August. But as September and October come around, I think silver investors will start to see this bullish thesis manifest itself to the tune of significant returns.
Write to Amy Rotman at Mining.com.au
Images: Mining.com.au
