Gold and Silver: Overbought Yet Underowned

Let me put this plain and simple: Wall Street just threw a tantrum — dumped gold and silver like they were hot potatoes. But don’t be fooled. This wasn’t the fundamentals falling apart. This was a bunch of overleveraged traders panicking when the price didn’t go straight up.

And here’s the kicker: silver and gold are still under-owned. That’s not my opinion — that’s coming straight from Saxo Bank’s Ole Hansen, one of the sharpest minds in the commodity space. He’s saying what I’ve been saying for months — the real danger here isn’t that gold or silver dropped, it’s that most folks don’t own nearly enough.

Let’s walk through what’s really going on.

A Reset, Not a Reversal

Gold and silver had a heck of a run lately — gold up 31%, silver up 45% over nine weeks. That kind of move always draws in fast-money traders, and once the rally paused, they started heading for the exits — all at once. According to Hansen, this selloff wasn’t driven by any one event, but more a shift from greed to fear.

Think of it like a crowded theater with one tiny door — the moment someone yells “fire,” everyone tries to bolt at the same time. That’s exactly what happened to silver in particular, which is nine times less liquid than gold. So every buy or sell gets magnified. Great on the way up, brutal on the way down.

But this is healthy in the long run. Markets need to cool off or they risk becoming bubbles — and bubbles always pop hard. A good shakeout now prevents a bigger crash later.

Diwali Dip and Dollar Strength

Now, you might’ve heard something about Diwali — the Indian festival where gold buying usually spikes. That’s true, but after the initial buying rush, demand actually softens. Combine that with a stronger U.S. dollar and a “risk-on” mood in the stock market, and suddenly metals weren’t the hot ticket they were a few weeks ago.

But let’s not pretend any of these short-term reasons erase the bigger picture.

The Bigger Picture: Silver in the Crosshairs

Here’s something the mainstream press isn’t talking about: the U.S. government is investigating whether to slap tariffs on imported critical minerals like silver, platinum, and palladium (called the Section 232 investigation).

This matters — a lot.

If the U.S. decides not to impose tariffs, we might see more silver flow from the U.S. to Europe, helping relieve some tightness in the London market. That could bring lease rates and premiums back down to normal.

But if new tariffs go into place? You can bet your boots silver prices will explode again. Why? Because that metal becomes stranded in the U.S., tightening supply globally and setting off another panic — but this time to the upside.

Under-Owned, Underestimated

Saxo Bank still sees higher prices coming, possibly into 2026. According to Hansen, this correction is a pause — not a pivot. The same forces that sent gold and silver higher earlier this year haven’t gone anywhere:

• Central banks are still buying
• Inflation’s not truly under control
• Geopolitical risks are rising
• The war on cash and surveillance via FedNow and other central bank digital currencies (CBDCs) is still coming

And through all that, most folks still don’t own any real money — physical gold or silver.

Let me say this as clearly as I can: if you’re not holding real assets outside the banking system, you’re still at risk. Don’t wait for CNBC to tell you it’s time to buy — by then, the smart money will already be in, and premiums will be sky-high.

What You Should Do Next

Look, I grew up working-class. I know what it feels like to scrape by and wonder if your savings will make it through another crisis. That’s why I’m here — not to scare you, but to prepare you.

If you’ve been waiting for a “better time” to buy silver or gold, this dip is your chance.

I highly recommend you grab a copy of Bill Brocius’ free eBook, Seven Steps to Protect Yourself from Bank Failure. It’s packed with no-nonsense steps you can take right now to insulate yourself from what’s coming.

And while you're at it, subscribe to Dedollarize’s alerts and products so you never miss a critical update.

Stay alert. Stay independent. Stay golden.
– Frank Balm