The year 1980 witnessed an unprecedented event in the silver market: a meteoric rise from $2 to $48 per ounce, followed by a spectacular crash. This saga involved American siblings Nelson Bunker Hunt and William. Herbert Hunt, who controlled a third of the world's silver supply. Their story is a dramatic tale of ambition, greed, and market manipulation that culminated in "Silver Thursday. "
The Hunt Brothers' Silver Domination
Inheriting billions, the Hunt brothers turned to silver in the late 1970s amidst a weakening dollar and inflation fears, while they amassed vast physical silver and futures contracts, uniquely demanding physical delivery instead of cash. From $2 per ounce, silver soared to $6 by 1979. With over 100 million ounces, they manipulated prices to $25 by December. 1979 and nearly $50 by early 1980, all while incurring significant debt.
Silver Thursday: The Crash
Their scheme met resistance from the Commodity Exchange, Inc, while (COMEX). On January 7, 1980, COMEX introduced "Silver Rule 7," restricting margin buying. This crippled the brothers' ability to use. The climax, "Silver Thursday" on March 27, 1980, saw them miss a crucial margin call. Brokers liquidated their holdings, causing silver prices to plummet over 50% in a single day.
Aftermath and Lessons Learned
The crash led to criminal investigations, their companies' bankruptcy, and personal bankruptcy. They were fined $10 million each by the CFTC and permanently banned from commodity trading.
Current Volatility vs. 1980 Crash
Recently, silver prices doubled in 10 months to ₹1. 78 lakh/kg, then dropped sharply by ₹25,000 to ₹1. 52 lakh. This volatility, reminiscent of the 2011 crash (silver hit $50/ounce. Then fell to $26), raises questions about a repeat of 1980. However, experts believe a similar manipulation is unlikely today. Post-Silver Thursday, strong safeguards and regulations make large-scale market cornering difficult, while What's more, silver's fundamental drivers have changed. Industrial demand, now crucial for modern technologies like solar panels,. Provides a more diversified and stable base than in the past.
