How Silver Price Volatility Revealed What Was Coming

And Why I Bought a Mac Instead of Waiting

pattern-recognition
markets
real-time
Published

January 5, 2026

What happened: Detected unusual silver market behavior in November, positioned ahead of supply disruption, Venezuela operation revealed systemic mineral competition.

The methodology: Biomarker signal → Track anomalies → Gather convergent evidence → Position before full understanding → Watch pattern reveal itself.

What you’ll learn: How to detect systemic pressure before geopolitical events make it obvious.

Biomarker

Something was making me nervous about waiting.

It was late December 2025, and I was watching GPU prices for a new AI workstation. The rational case for waiting was clear: prices were high ($3,500-4,000), supplies were limited, post-holiday sales might come. Every logical analysis said wait.

But the nervousness persisted. And I’ve learned not to ignore that signal.

This is how pattern recognition works when you don’t yet know what pattern you’re detecting.

During this time, silver started increasing in price. I watched the price climb from Black Friday through Christmas. Prices climbing and then dropping. Silver is known for volatility but I had observed nothing like this over the last 10 years.

I started watching more. Trying to figure out what could be driving this behavior.

Market Structure Tells a Story

Gold and silver have long been purchased by those worried that US Government debt may lead to currency inflation. BRICS and other countries have been de-dollarizing for years. These factors have been present for a long time and silver prices maintained a trading range throughout.

Data centers, solar panels, EVs and batteries have been increasing demand for silver. But again, you would expect gradual price increases over months or years. Not dollar and multi-dollar swings in a day. This was new.

The markets are more complicated than just watching stock prices. For US customers:

  • LBMA (London Bullion Market Association) - buy contracts, can have metal delivered
  • COMEX (Commodity Exchange Inc.) - futures and options, betting on price movements
  • SMM (Shanghai Metals Market) - spot prices for physical metal

Normally, COMEX prices would be higher than LBMA or SMM since futures include storage costs.

But the pattern was inverted: LBMA prices were higher than COMEX, with SMM prices greater than LBMA. The spreads were $4.00 or higher for SMM versus LBMA.

This implies physical metal buying is driving the price—not investment products.

I didn’t understand the mechanics behind this. But silver is needed for electrical and computer components, AI data centers, batteries, green energy technologies, electrical infrastructure. Why the sudden increase in physical buying?

From September through November 2025, silver increased from approximately $40 to $60. From Christmas Eve to the day after Christmas, it jumped another $8.

One has to be careful interpreting holiday price moves—fewer traders. But SMM still had metals being purchased at premium prices. Normally, arbitrage would eliminate this—buy from COMEX and LBMA, sell at SMM. This wasn’t happening.

Positioning Under Uncertainty

I decided it was time to buy. I wasn’t sure what was occurring, but knew silver is needed for chip manufacturing. I was monitoring GPU prices and availability. Prices didn’t drop after Christmas and no new supplies were coming in.

I got lucky—an article came out suggesting how to pick the right LLM to run on a Mac. I looked at computers available at the local Mac store and found an M3 Mac Studio with 96 GB memory. Not the fastest at fine-tuning, but for running larger models it can handle more than an RTX5090. And the price was the same as just the GPU alone.

I bought it December 26th.

The Signal I Didn’t Yet Understand

I made this purchase based on the pattern I could see in silver markets. But I didn’t yet understand what that pattern was revealing about the system itself.

The full picture emerged over the next week.

First, more details about China’s silver policy became clear: companies needed capacity for 80+ tons annually, credit lines exceeding $30M, state approval for all exports. Combined with the US listing silver as a Critical Mineral on November 7th, industrial users were scrambling.

Then on January 3rd, the geopolitical driver became visible: US military conducted special operations in Venezuela, removing President Maduro and his wife. The stated justification: drug trafficking, democracy, cartel operations.

The actual strategic asset: Venezuela holds massive rare earth deposits—plus significant gold, copper, and silver production. Silver is often a byproduct of gold and copper mining operations.

China had been accessing these minerals through existing cartel arrangements. The US operation disrupted that access—just three months after China announced their own export restrictions on materials they control.

Suddenly the market behavior I’d been tracking made sense:

  • China restricts silver exports they control (October 26)
  • Markets begin scrambling for alternative supply sources (my November-December volatility signal)
  • Physical premiums spike as buyers need actual delivery, not paper contracts
  • US moves to secure alternative supply sources China was accessing (January 3)

My GPU nervousness wasn’t about Nvidia supply chains specifically. My biomarker was detecting systemic fragmentation of the entire mineral supply infrastructure feeding tech manufacturing.

What This Means Going Forward

This isn’t a temporary supply squeeze. The systemic pattern suggests multi-year constraints.

Convergent mineral overlap:

  • Rare earths (semiconductors, batteries, defense systems)
  • Silver (chips, solar, EVs, AI infrastructure)
  • Copper (electrical infrastructure, EVs)
  • Gold (electronics, financial positioning)

All four minerals:

  1. Come from overlapping extraction infrastructure
  2. Feed the same tech manufacturing supply chains
  3. Are now contested between major powers
  4. Face both export restrictions AND geopolitical access disruption

The standing wave trap most people are riding: “Supply chains are disrupted, I’ll wait for things to normalize before making major purchases.”

This assumes:

  • Continuous manufacturing capacity
  • Stable geopolitical mineral access
  • Market cycles returning to historical means

The actual pattern: Mineral supply infrastructure is fragmenting along geopolitical lines. The “normalize” people are waiting for may not happen for years.

Fire in the Cave Methodology Working as Designed

Phase 1: Biomarker Detection

  • Something made me nervous about waiting on GPU purchase
  • No rational explanation yet—prices high, supplies limited, “smart” to wait
  • But the signal persisted

Phase 2: Track Unusual Movement

  • Silver volatility unlike anything in 10 years
  • Market structure anomalies (physical premiums, spread behavior)
  • Pattern didn’t fit existing explanations

Phase 3: Gather Convergent Evidence

  • LBMA vs COMEX vs SMM spreads
  • Physical buying urgency during holiday thin markets
  • Persistent premiums that arbitrage should eliminate but didn’t

Phase 4: Position Before Full Understanding

  • Bought Mac Studio late December
  • Knew silver mattered for chip manufacturing
  • Didn’t yet understand the geopolitical mineral competition driving the pattern

Phase 5: Systemic Pattern Revealed

  • Venezuela operation (January 3) shows rare earth + silver access competition
  • China restrictions + US operation = multi-year supply fragmentation
  • My biomarker detected this building pressure months before the geopolitical moves became public

The pattern was building for months. I positioned in late December. Most people will only recognize it after Venezuela becomes common knowledge—when the positioning window has closed.

Questions to Ask Yourself

On Personal Navigation:

  • What biomarker signals are you currently dismissing as “irrational”?
  • Where is your intuition telling you to move, even without logical explanation?
  • What unusual price behavior are you noticing but not yet understanding?

On Systemic Positioning:

  • What essential infrastructure are you assuming will remain continuously available?
  • If rare earth/silver supply chains fragment for 3-5 years, what becomes scarce?
  • Where could you position now, ahead of constraints becoming obvious to everyone?

On Methodology:

  • What multiple independent data sources could you track for convergent evidence?
  • How do you distinguish signal from noise when the pattern isn’t yet clear?
  • When was the last time you followed a biomarker before having full rational justification?

Welcome to the Cave

This is what Fire in the Cave methodology looks like in practice: following biomarker signals through unusual market behavior to convergent evidence, positioning before full understanding, watching systemic patterns reveal themselves.

The fire illuminates the patterns painted on the walls—not the shadows cast by those who claim to know what’s coming.

I positioned on December 26th. The Venezuela operation on January 3rd revealed what the pattern meant. Most people will only recognize it in the coming weeks, after the narrative becomes common knowledge. By then, the positioning window has closed.

This is the first of many pattern recognition demonstrations I’ll share throughout 2026. Some will prove prescient. Some won’t. That’s the nature of real-time experimentation.

If you’re willing to do the work of building your own pattern recognition capabilities rather than waiting for someone to tell you what to see, welcome to Fire in the Cave.

Subscribe to follow along as I share the methodology—and continue documenting real-time pattern recognition as 2026 unfolds.