The Billionaire Brothers Who Broke the Silver Market!

The time was around late 1970s, two Texas oil tycoons set out to corner the silver market.

Drove the prices up by 400% in just months.

What followed was one of the wildest boom-and-bust tales in financial history — with lessons investors still talk about today.

Nelson Bunker Hunt and William Herbert Hunt weren't your average traders.

They were oil-billionaires from Texas, heirs to one of America’s wealthiest families.

But they wanted more and their idea was simple.

Inflation was rising and the Hunt brothers feared that the US dollar would lose value.

If the dollar weakened, investors would turn to metals like gold and silver, driving prices higher.

Gold was expensive, while silver appeared to be the more affordable, undervalued alternative.

So, the brothers turned their attention to silver.

With their wealth, the Hunt brothers began acquiring silver in large amounts.

They purchased physical silver and stored it in warehouses.

Further, they bought futures contracts on silver, which gave them the right to buy more silver at a later date.

The futures contracts are generally settled in cash.

Traders usually do not take delivery of the metal.

But, the Hunt brother chose to do things differently.

They opted for delivery of the silver rather than cashing out the contracts.

This move created a shortage in the market.

With less silver available for other buyers, prices started rising fast.

As silver prices soared from $11 to $50 an ounce, the brothers ran out of cash to buy more silver.

But that didn’t slow them down.

With their family name, they were able to get loans easily at low interest rates.

They then persuaded wealthy investors, some of them from the Middle East, to join them.

With more money in their pockets, they bought even more silver.

This put pressure on the short-sellers who had bet that silver prices would fall.

The short-sellers had borrowed silver and sold it at the current price, expecting to buy it back later at a lower price (assuming prices would drop) before returning it to the lender.

As prices continued to climb, these short-sellers had to cover their positions by buying back silver at increasing prices.

The rush to buy pushed silver prices even higher.

The Hunt brothers owned over 200 million ounces of silver at the peak.

Their holdings were then worth $4.5 billion - about $15 billion in today’s money.

But their success didn’t last.

The regulators viewed the move as a bid to manipulate the silver market.

The US government was not pleased, particularly because Middle Eastern investors were involved.

Just a few years earlier, oil-producing countries had caused an energy crisis by raising oil prices, which hurt the US economy.

In response, the regulators stepped in.

New rules made it harder for anyone to buy silver futures on margin (using borrowed money).

The Hunt brothers could no longer afford to purchase as much silver as previously.

Short-sellers, meanwhile, continued to put more bets that silver prices would decline.

Suddenly, the Hunt brothers found themselves trapped and the prices began to drop.

Brokers required the Hunt brothers to commit more money as margin to pay for their losses.

They had initially been able to borrow the money to fulfill these margin calls.

However, the Federal Reserve soon barred banks from lending for speculative purposes.

With no more credit available, the Hunt brothers couldn’t meet their obligations.

On March 27, 1980 - known as "Silver Thursday" - they missed their due obligations for the first time.

Panic spread. Silver prices crashed to $11 an ounce.

The Hunt brothers lost billions.

Banks and brokerage houses that had supported them also incurred huge losses.

A few of them went bankrupt.

The government also refused to bail them out.

The Hunt brothers had to arrange a private bailout from a consortium of banks and companies.

They were later dragged before Congress, fined, and forced to sell off their silver holdings.

It took them over a decade to unwind their silver positions and settle their debts.

Although they fell out of billionaire status, they were still rich according to most measures.

The Hunt brothers' silver saga is one of the greatest market manipulation stories in history - and a cautionary tale of what happens when greed and leverage spiral out of control.

Fast forward to today, and echoes of the Hunt brothers’ silver saga can still be felt in modern markets.

Whether it’s the retail frenzy in meme stocks, the rapid rise and fall of crypto tokens, or speculative runs on small-cap stocks — the mix of leverage, herd mentality, and fear of missing out (FOMO) continues to drive volatile price moves.

Just like in 1980, when the Hunt brothers leveraged borrowed money to push up silver, today’s traders often take outsized positions using margin, hoping for quick returns in a bullish cycle.

Fast forward to May 2025, and silver has once again crossed the ₹1 lakh/kg mark in India — a clear signal of renewed demand and investor interest.

Source: SILVERPRICE

According to the India Bullion and Jewellers Association (IBJA), the retail price of 999-grade silver was recorded at ₹98,492 per kg.

Globally, silver is trading around $32.73 per ounce, marking a 15% increase since the beginning of the year.

This renewed interest in silver is driven by its dual role as both a precious metal and an industrial commodity.

The metal's applications in electronics, solar energy, and electric vehicles have bolstered its industrial demand.

Concurrently, economic uncertainties and inflationary pressures have enhanced silver's appeal as a safe-haven asset.

Analysts believe silver’s relative undervaluation versus gold could offer a tactical investment edge for diversified portfolios.

The gold-to-silver price ratio remains historically high, indicating potential for silver to outperform in the medium term.

However, investors should approach with caution, considering silver's inherent volatility and the factors influencing its market dynamics.

Add to this the global uncertainty around inflation, interest rates, and commodity demand — and we’re in an environment where price spikes can happen fast, but so can crashes.

The Hunt brothers’ silver saga teaches us that market speculation, especially when driven by borrowed money, can lead to rapid price swings — both up and down.

For investors, it highlights the importance of understanding risk, avoiding over-leverage, and focusing on long-term strategy rather than chasing quick gains.

Sources and References:

SILVERPRICE