commodities/ gold
CME’s margin hike is just a smokescreen to cover major shortages in the physical market - Bawden Capital
By Neils Christensen
Published:
Jan 08, 2026 - 3:48 PM
Updated:
Jan 08, 2026 - 4:21 PM
Kitco News
The Leading News Source in Precious Metals
Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity. Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage (often exclusive) of important industry events and analyses of market-affecting developments.
(Kitco News) - Despite a strong start to the new year, the silver market is still struggling, unable to hold gains above $80 an ounce.
The precious metal has been unable to recover from last week’s selloff after the CME increased margins for precious metals. While the market is expected to continue to see elevated volatility, one fund manager and market strategist warned investors not to get caught up in the noise.
In the final week of 2025, silver futures saw their biggest weekly decline since March, when markets were roiled by President Donald Trump’s impending global tariffs.
In a recent commentary published on LinkedIn, Jen Bawden, founder and CEO of Bawden Capital, said that the CME’s move to increase margins to control speculative interest in silver is just a “smokescreen” to hide a much bigger issue that will ultimately lead to higher prices.
She said that she is looking for silver prices to rise to $200 an ounce.
“To the untrained eye, the mainstream narrative will blame excessive speculation and a holiday flush. They are wrong. To those of us who navigated the wreckage of 2000 and 2008, this is not a crash; it’s a desperate, coordinated bailout of the banking system, to protect underwater banks happening precisely 24 hours before the world’s physical silver market decouples,” she said. “My 30 years tracking market cycles, including successfully predicting the 2000 tech bubble and the 2008 financial crisis, have taught me to look beyond the headlines. Today's action is a textbook paper smash, a deliberate weaponization of margin requirements designed to save deeply short bullion banks from the impending physical shortage.”
While falling prices in silver futures could spook some investors into thinking the market is headed toward a crash, Bawden said that the fundamental outlook of the physical market shows the complete opposite picture.
Bawden warned that a physically tight silver market will only get tighter as China, since Jan. 1, has restricted the export of refined silver.
“This policy — which impacts approximately 70% of the world's physical silver supply — will fundamentally alter the global flow of metal,” she said.
The ghosts of the Hunt Brothers still haunt the silver marketSome analysts have seen the CME’s margin hike as a potential top in the market, similar to what happened in the early 1980s. The Hunt brothers famously attempted to corner the market by purchasing nearly two-thirds of annual production. However, much of that silver was bought with leveraged capital, and when regulators introduced new trading rules that heavily restricted the purchase of commodities on margin, silver prices collapsed, ending the Hunts’ run.
However, Bawden noted that today, instead of one faction trying to corner the market, different groups are fighting for supply as above-ground stockpiles dry up.
“The Hunt Brothers of 2026 aren't just two wealthy Texans; they are China, the Solar Industry and European Central Banks themselves,” she said.
Bawden said that silver’s recent designation as a critical metal will only increase industrial demand. At the same time, the ongoing implementation of the Basel III regulatory framework will continue to force bullion banks to hold more physical metal.
“With the U.S. and EU now designating silver as a Strategic Mineral, the race for the remaining 22,000 tonnes in London vaults has become a matter of national security,” she said. “The Smart Money is no longer just buying gold; they are cornering the silver market before the China export ban shuts the door for good.”
Another element of what Bawden sees as a perfect storm for silver is expected interest rate cuts from the Federal Reserve through the new year.
“With interest rates falling and the U.S. Dollar Index slipping below 100, the opportunity cost of holding silver has vanished. When the dollar devalues, silver doesn't just rise; it stampedes,” she said.
Although silver prices are struggling to find solid ground, Bawden said that any correction should be seen as a long-term buying opportunity. She also sees significant potential in silver miners.
Bawden said that she is currently long Metalla Royalty & Streaming (NYSE: MTA), Wheaton Precious Metals (NYSE: WPM), Sprott Physical Silver Trust (NYSE: PSLV), Sprott Silver Miners & Physical Silver ETF (NYSE: SLVR), and Sprott Active Gold & Silver Miners ETF (NYSE: GBUG).
Neils Christensen
Neils Christensen has a diploma in journalism from Lethbridge College and has more than a decade of reporting experience working for news organizations throughout Canada. His experiences include covering territorial and federal politics in Nunavut, Canada. He has worked exclusively within the financial sector since 2007, when he started with the Canadian Economic Press. Neils can be contacted at: 1 866 925 4826 ext. 1526 nchristensen at kitco.com @Neils_c
 |
