Jim Cramer Warns Silver Is 'Overvalued' As Peter Brandt Explains Why Your 'Supply Shortage' Narrative Might Be Dead

Silver prices are retreating from a historic peak after two of the most prominent voices in finance issued a stark reality check to investors riding the white metal's parabolic surge.

The Peak And The Pivot

On Jan. 29, silver reached a staggering all-time high of $121.6700 per ounce. However, the euphoria was short-lived.

By Jan. 30, the market witnessed a sharp correction, with silver spot prices falling to $108.8400—a drop of 5.90%, as of the publication of this article.

This sudden $6.82 slide coincided with a series of warnings from veteran market watchers who suggest the rally has disconnected from fundamental reality.

Cramer's Contrarian Call

Jim Cramer, host of CNBC's Mad Money, took to X to dampen the enthusiasm of silver bulls. Despite the metal's record-breaking performance, Cramer signaled that the momentum might be shifting back toward gold.

“The unwind of gold? I think silver is way overvalued,” Cramer stated.

His assessment suggests that the rapid appreciation of silver may have reached a point of exhaustion, making it vulnerable to a significant reversal as investors rotate back into more stable safe-haven assets.

Debunking The Shortage Narrative

While many retail investors have pointed to supply deficits as the catalyst for the triple-digit price tag, futures market trader Peter Brandt offered a more technical and sobering perspective.

Brandt noted that the COMEX traded a massive 4.3 billion ounces of silver in a single week—the equivalent of 5.2 years of global production. Brandt warned that current prices would inevitably trigger a “pipeline glut” by altering the behavior of both producers and consumers.

“If I am the CEO of a low cost-of-production mining operation, I would be INSANE for not hedging at least three years of production at $110/oz,” Brandt explained.

He further cautioned that sustained high prices would lead to a shift in the Silver Institute's supply and demand tables: “Take the Silver Institute’s S&D table. Now, double or even triple the Recycling supply (which will happen) and reduce demand by 10% as the cost of Silver drives industry to alternative uses because of price, and you then begin to create a pipeline glut.”

The Bottom Line

As the market digests these warnings, the question remains whether the drop to $108 is a temporary dip or the beginning of the “unwind” predicted by the experts. For now, the “supply shortage” narrative is facing its toughest test yet.

Here’s a list of silver and silver miners-linked ETFs for investors to consider.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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