When you had purchased silver in 1980, your returns at present could be… nil.
No, that’s not a typo. The calculation assumes you acquire silver round January 1, 1980, and held all of it this whereas. 4 many years later, the shiny metallic wouldn’t have made you a dime. And that’s the place the story of Nelson Bunker Hunt and his brothers begins.
Bunker Hunt was oil-rich, Texas-rich, however paranoid about not staying that manner. With U.S. inflation working above 10%, he feared paper cash would grow to be simply that: paper. So, the Hunt brothers determined to hedge. Not with gold, however with silver, the “poor man’s gold.”
Why silver?
Properly, for one, gold possession was restricted within the U.S. till 1975. Silver, however, was authorized, risky, and had industrial use, from movie to electronics. Extra volatility meant extra revenue if you happen to might transfer the market. And transfer it they did.
At their peak, the Hunts managed practically one-third of the world’s deliverable silver. They purchased round 100 million ounces of bodily silver, stashing it in Swiss vaults, and managed one other 100 million ounces by way of futures contracts on COMEX and CBOT. The worth of silver shot from about $2 an oz in 1973 to virtually $50 in early 1980 — the yr of their reckoning.
Then, issues went south.
By 1980, commodity exchanges had sufficient of the sport and imposed a number of restrictions, triggering a steep fall in costs. The Hunts, who had large open lengthy positions, confronted a $134 million margin name. Contemplating the billions that they had tied up in silver, it shouldn’t have been inconceivable, however the cash was locked up, and their dealer wanted money. Sadly, the Hunts had been travelling and unreachable when the decision got here.
Their dealer had no entry to liquid funds and was compelled to dump their positions, triggering “Silver Thursday”, a complete market meltdown.
Bunker Hunt by no means recovered. The empire constructed on silver mud collapsed underneath the burden of its personal leverage.
Why deliver this up now?
As a result of silver earlier this month touched $50 an oz, after greater than 4 many years. And but, if you happen to had purchased silverware on January 1, 1980, your return would nonetheless be nil.
So why did silver lastly revisit these historic highs?
This time, there have been no billionaire hoarders. As a substitute, silver’s twin attraction — half industrial demand, half safe-haven asset — did the trick. And there was additionally the rub-off from gold.
Over the previous few years, central banks around the globe have been hoarding gold. Their vaults, as soon as overflowing with {dollars} and U.S. Treasuries, are actually being rebalanced. Central banks rushed to purchase gold amid the conflict in Ukraine, tensions within the Center East, and a weakening greenback. The ultimate spark got here from Donald Trump’s tariff conflict earlier this yr.
Central banks have been shopping for over 1,000 tonnes of gold yearly since 2022, greater than double their typical tempo. They now maintain an estimated 36,344 tonnes of gold, surpassing their mixed holdings of {dollars} and Treasuries for the primary time since 1996.
That sparked FOMO amongst retail buyers, too. Gold ETFs noticed file inflows, a lot that some funds struggled to search out avenues to deploy the money. Commerce tensions, U.S. price cuts, and Russia’s persistence in Ukraine all added gas to the gold rush by way of 2025.
For some time, it regarded like nothing might cease gold and silver. Predictions had been flying that the 2 metals would outshine each different asset class within the coming years.
However as Mark Twain mentioned, historical past doesn’t repeat itself, nevertheless it usually rhymes.
Within the final week, costs of each metals fell over 6% amid reviews of easing commerce tensions and a stronger greenback. Revenue-taking additionally kicked in.
So, is gold outdated?
Not fairly. At the same time as this text was being written, costs ticked up once more forward of key US information that might form the Fed’s subsequent transfer.
Revenue-taking might proceed, however geopolitics isn’t completed twisting but. China might not fold, Trump gained’t blink, Putin gained’t soften, and the greenback’s energy stays data-dependent.
If historical past is any information, the metallic might lose some shine, however the story of greed, concern, and silver desires by no means will get outdated.
Oh, Calcutta!
Speaking of rising asset costs, solid your thoughts again to 2001, when the costs of the so-called Ok-10 shares soared. The “Ok” stood for Ketan Parekh, a stockbroker who was accused of artificially inflating the costs of a choose set of firms. When the bubble burst, it left deep scars. Some by no means recovered, together with the Calcutta Inventory Trade (CSE).
This yr, the second-oldest inventory alternate in India reportedly celebrated what its members known as their final Diwali. The alternate had been on life assist for years. A lot of its members had been among the many hardest hit by the Ketan Parekh rip-off, with a number of defaulting on funds. SEBI had educated its weapons on the alternate, and common buying and selling operations ceased in 2013.
The regulator had pulled up CSE for failing to fulfill key compliance norms, together with the requirement for a separate clearing company and a minimal turnover threshold. The alternate fought again, first in courtroom, then in greater courts, nevertheless it was already working out of cash. Just lately, it determined to not pursue the case additional. Workers have reportedly been supplied voluntary retirement, and even the long-lasting constructing might quickly go on the block.
A inventory alternate, in some ways, is sort of a place of religion. It survives on integrity and liquidity, which assist it take up shocks and setbacks. CSE lacked each. Over time, a lot of the liquidity in India’s fairness markets was cornered by the NSE and BSE, leaving solely crumbs for regional exchanges.
Based in 1908, CSE wasn’t far behind BSE in its early years. However after the Ketan Parekh episode, when members couldn’t recuperate their losses, dealer confidence vanished, and with it, the alternate’s relevance.
To make certain, the alternate has not confirmed its closure.
CSE shouldn’t be alone. Over the previous few many years, different regional exchanges reminiscent of Ahmedabad, Delhi, and Madras have additionally shut down. This has given technique to the duopoly of NSE and BSE.
Slippery Sanctions
Washington this week raised the stakes towards Moscow by imposing sanctions on Russia’s two greatest oil exporters, Rosneft and Lukoil. The transfer got here after one more failed try by US President Donald Trump to dealer peace in Ukraine.
India, the second-largest importer of Russian oil, is anticipated to really feel a number of the ripple results. However will it actually? New Delhi has usually managed to navigate such sanctions by way of intelligent buying and selling preparations and through the use of loopholes that Washington itself typically leaves open. A watertight sanctions regime towards Moscow would inevitably harm the US too, so this time Trump has focused solely the businesses, not Russian oil exports as an entire.
The sanctions might nudge crude costs up barely, however not sufficient to pinch customers within the US. Oil remains to be buying and selling at multi-year lows, and even a ten% enhance wouldn’t make a lot distinction at American gas pumps.
For India, the state of affairs is barely extra difficult. For the reason that sanctions apply to Russian corporations and to not the oil itself, Indian refiners might nonetheless discover methods to maintain the barrels flowing. Formally, India solely complies with United Nations–mandated sanctions, reminiscent of these imposed on Venezuela and Iran.
The true take a look at will probably be how refiners, notably Reliance Industries, adapt to the brand new restrictions. A lot will depend on whether or not President Putin chooses peace or if New Delhi and Washington lastly attain a commerce deal that has been in dialogue for months. Both manner, India’s vitality diplomacy is about to be examined as soon as once more.
Leash on AI
Final month, this text had reported how a number of Indian celebrities are dashing to courtroom to cease impersonation of their character, together with their voice. One large motive for this authorized scramble is the rise of AI-generated deepfakes. And simply how “deep” are these fakes? Do that for measurement: a pretend film trailer that includes Akshay Kumar as a state chief minister in a movie that doesn’t exist, and a “new” tune by Asha Bhosle, created by cloning her voice.
Now, the federal government has entered the scene. In a draft notification, the IT Ministry mentioned: “Such content material might be weaponised to unfold misinformation, injury reputations, manipulate or affect elections, or commit monetary fraud.”
Therefore, the federal government has proposed that each one AI-generated content material on main social media platforms carry a transparent disclaimer — a digital “pretend alert” watermark overlaying at the least 10% of the picture, video, or audio. The intention is straightforward: be sure that nobody errors a deepfake for the true deal.
Platforms with greater than 5 million customers will probably be answerable for making certain the foundations are adopted. In accordance with the draft guidelines, such platforms should receive a person declaration on whether or not uploaded info is synthetically generated, deploy “cheap and proportionate” technical measures to confirm such declarations and likewise be sure that synthetically generated info is clearly labelled or accompanied by a discover indicating the identical.
Market Wrap
Indian shares rose for the fourth straight week, marking their longest successful streak this calendar yr. The Nifty 50 and Sensex gained 0.3% every, after rising about 3% within the earlier week.
IT and metallic indices superior in the course of the week, whereas most client items shares slipped.
If not for Friday’s sell-off, the weekly positive factors would have been stronger. Feedback by Commerce Minister Piyush Goyal hinting at hurdles in commerce talks with the US triggered revenue reserving.
“We’re in lively dialogue with the EU. We’re speaking to the US, however we don’t do offers in a rush and we don’t do offers with deadlines or with a gun to our head,” Goyal is reported to have mentioned at Berlin Dialogue in Germany.
Hindalco, Shriram Finance, and Infosys had been the highest gainers this week, rising 6–7%. Most financials ended decrease, with ICICI Financial institution down 4% and HDFC Financial institution practically 1%. Different main losers included Everlasting, UltraTech, Adani Ports, HUL, and Eicher Motors.
Different Headlines
- Reliance Industries to halt oil imports from Russia after US sanctions on Rosneft
- Hero MotoCorp enters UK with Hunk 440 bike priced at 3,990 euros
- Eli Lilly permits Cipla to promote weight-loss drug underneath new model Yurpeak in India
- Tata Applied sciences to rent extra locals in US as Donald Trump cracks down on immigration
- Jaguar Land Rover cyberattack might price UK economic system about $2.5 billion, says cybersecurity agency
- India’s infrastructure output progress slows to three-month low of three% in September
- Ola Electrical founder Bhavish Aggarwal named in police grievance over worker suicide
- Germany’s Thyssenkrupp in talks with Jindal Metal over sale of metal unit
- Ecommerce startup Meesho to boost Rs 4,250 crore by way of recent difficulty in IPO
- Hindustan Unilever Q2 web revenue rises 3.8% to Rs 2,694 crore
- Colgate Palmolive India Q2 revenue falls 7.2% to Rs 328 crore as GST lower disrupts gross sales
- HDFC Financial institution Q2 standalone web revenue rises 11% to Rs 18,641 crore, beats forecasts
- ICICI Financial institution standalone web revenue rises 5% to Rs 12,359 crore, tops estimates
- IndusInd Financial institution swings to Q2 web lack of Rs 436 crore from revenue of Rs 1,331 crore yr in the past
That’s all for this week. Till subsequent week, pleased investing!
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