The Rundown - "Why Silver Just Collapsed"

Host: Zaid Admani
Date: January 31, 2026
Episode Theme:
This episode offers a quick, insightful deep dive into the meteoric rise and sudden crash of silver prices, exploring the commodity’s unique market dynamics, the forces behind this volatility, and the broader economic and political factors at play—including the surprising influence of President Trump's Fed chair pick.

Main Theme Overview

• Focus: Dissects the rapid tripling and historic crash in silver prices, analyzing supply and demand, industrial trends, speculation, and a key political trigger.
• Purpose: Equips listeners with a clear understanding of silver’s market role, recent moves, and what the future could hold for investors.

Key Discussion Points & Insights

1. What is Silver’s Market Role?

[01:00]

• Silver combines the traits of a safe-haven asset like gold with crucial industrial applications.
• “Silver has the highest electrical conductivity of any metal. It also has the best thermal conductivity. And these properties make it absolutely essential to modern technology.” – Zaid [02:00]
• Unlike gold, which is largely stored, 71% of silver is mined as a byproduct while extracting other metals—making overall supply more susceptible to disruptions.

2. Why Did Silver’s Price Triple?

[03:00]

• Silver’s market size is much smaller than gold’s ($5T vs. $35T), making it much more volatile.
• A diverse mix of buyers—from industrial users to aggressive retail and institutional speculators—piled in, amplifying price swings.
• “Everyone seems to be piling into the silver trade, which has caused a massive run up in prices.” – Zaid [04:00]

The Bull Case Factors

[04:30]

• Supply Deficit: The market has seen 5 straight years of demand exceeding supply.
• China’s Export Restrictions: Starting Jan 1, China began restricting silver exports, positioning it as a strategic asset.
• Surging Demand: Solar panels (29% of industrial silver demand in 2024), skyrocketing AI data center construction.
  “More data centers means more servers, more chips… all of those things need silver.” – Zaid [06:15]
• Dollar Weakness:
  • US dollar index fell 9% in 2025, igniting fear of debasement and boosting the appeal of hard assets.
  • Geopolitical uncertainty and fiscal policy concerns compounded the rush.
• Speculative & Meme Frenzy: The sharp rally attracted retail traders, some using leverage, accelerating the price surge.

3. What Caused Friday’s Crash?

[08:00]

• On Jan 30, 2026, silver plunged over 30% in a single day ($120 to <$80/oz). Gold also dropped 10%.
• The Trigger: News broke that President Trump had nominated Kevin Warsh as the next Fed Chair.
• “You wouldn’t think the next Fed chair would impact the price of metals, right? Well, it absolutely could.” – Zaid [09:05]

Why Warsh?

[09:30]

• Warsh is perceived as a “hawk” on inflation, likely to favor higher interest rates.
• Higher rates make non-yielding assets like silver and gold less attractive (“If you could get 5% by holding a Treasury bond... why would you hold silver that pays you nothing?” – Zaid [10:25]).
• The prospect of rising rates drove the dollar up and metals down.
• Leverage Unwinds: Rapid price drops triggered margin calls and forced liquidations, exacerbating the crash.

4. Was the Market Overreacting?

[12:00]

• Zaid notes that Warsh has recently echoed calls for rate cuts (possibly to win the nomination), casting doubt on whether rates will actually rise.
• “It’s possible he was only saying that publicly to get the Fed chair job.” – Zaid [12:40]

5. Bear Case and Historical Context

[13:00]

• Some analysts see this as a bubble: vertical runs in silver often end badly (e.g., 2011 crash after a similar surge; prices stayed flat for a decade).
• Growing fears that the AI boom could pause, stalling new data center construction and demand for silver.

6. Host’s Take: Is It a Dip to Buy?

[14:30]

• Zaid does not typically invest in commodities, but admits FOMO as silver soared.
• He remains bullish on the fundamentals (tight supply, enduring industrial demand, China’s position, dollar weakness) but warns of extreme volatility and the possibility of another lost decade.
• “If you do plan to invest in Silver for the first time, just be prepared for some volatility, maybe even a potential crash and a decade of the price not going anywhere.” – Zaid [15:45]

Notable Quotes & Memorable Moments

• “Silver has the highest electrical conductivity of any metal. It also has the best thermal conductivity. And these properties make it absolutely essential to modern technology.” – Zaid [02:00]
• “Everyone seems to be piling into the silver trade, which has caused a massive run up in prices.” – Zaid [04:00]
• “More data centers means more servers, more chips… all of those things need silver.” – Zaid [06:15]
• “You wouldn’t think the next Fed chair would impact the price of metals, right? Well, it absolutely could.” – Zaid [09:05]
• “If you could get 5% by holding a Treasury bond with near zero risk, why would you hold silver that pays you nothing?” – Zaid [10:25]
• “It’s possible he was only saying that publicly to get the Fed chair job.” – Zaid [12:40]
• “If you do plan to invest in Silver for the first time, just be prepared for some volatility, maybe even a potential crash and a decade of the price not going anywhere.” – Zaid [15:45]

Timestamps for Key Segments

• [00:00] Episode Introduction & Main Questions
• [01:00] What is silver’s economic role?
• [03:00] Market structure, volatility, and investor mania
• [04:30] Supply-demand imbalance, China’s export restrictions
• [06:00] Industrial demand, AI hype
• [07:30] Safe haven play, dollar weakness, meme factor
• [08:30] Friday’s crash details—price collapse, gold’s slide
• [09:30] Trump’s Fed pick: Kevin Warsh and market impacts
• [11:00] Interest rate effects on metals
• [12:00] Market reaction—possible overreaction, Warsh’s dovish pivot
• [13:00] Comparing to past silver bubbles (2011) and bear case
• [14:30] Zaid’s personal take, tips for silver investors

Summary Table: Forces Shaping Silver’s Volatility

| Category | Bull Case | Bear Case | |------------------------|---------------------------------------------------|-------------------------------------------------| | Supply | Years of deficits, China export controls | Possible supply catch-up, speculative overshoot | | Demand | Industrial uses, AI/data centers, green tech | AI boom slows, demand pause | | Macro | Dollar weakness, geopolitical uncertainty | Rate hikes strengthen dollar, crush metals | | Sentiment/Speculation | FOMO, retail/institutional piling in | Bubble-like patterns, leverage unwinds |

Final Thoughts

The episode provides a concise but nuanced take on the silver market's unprecedented swings, emphasizing the importance of both industrial demand and financial speculation, while connecting the dots with macro and political developments. Investors are cautioned to expect wild volatility and to remember the lessons of past bubbles, but the fundamental supply-demand story is still strong—for now.

Engage with the Host:
Zaid invites feedback on silver’s outlook and future topics via comments on YouTube and Spotify.

Skip straight to the post-crash analysis at [08:00] for the dramatic play-by-play of silver’s wild Friday, and tune in around [14:30] for Zaid’s actionable, big-picture perspective on investing in commodities.