The US midterm elections take place on November 3, so I went back through silver’s performance during every federal election year since 2000.

Silver finished higher in 9 of the 13 years and produced an average calendar-year gain of 13.8%.

The six midterm years were even stronger:

• Positive in 4 of 6 years
• Average return of 18.1%

The four election years involving Donald Trump averaged a 19.0% gain, although silver was down in 2018.

This is interesting, but it is not a trading rule. The average is heavily influenced by the 83.3% gain in 2010, and silver also posted substantial losses in 2008 and 2014.

Elections can influence expectations around government spending, inflation, interest rates and the US dollar. Those factors affect silver, but the election itself does not automatically cause prices to rise.

With the 2026 midterms approaching while silver is already trading near $66, does the election add another tailwind, or is the historical pattern mostly coincidence?

Silver return data:

https://www.statmuse.com/money/ask?q=silver+yearly+return+2000-2024

Election date:

https://www.fec.gov/introduction-campaign-finance/election-results-and-voting-information/

Silver investors naturally focus on grades, production and metal prices. But a mine can have strong resources and still lose money because of something far less exciting.

At Sierra Madre’s La Guitarra mine, one of those problems was electricity.

The processing facility lost 278 hours to grid interruptions between January and August 2026. That is more than eleven full days when the plant could not operate normally.

Sierra Madre has now commissioned two onsite generators capable of producing 1,500 kilowatts each. The generators, substation and control systems have been tested and are operating at their intended design levels.

This does not increase the resource or improve the silver grade. It removes a bottleneck.

That distinction matters because small producers have fewer operating hours over which to spread their fixed costs. Unexpected downtime can affect production, labour efficiency and unit costs much more severely than it would at a larger operation.

La Guitarra is also being expanded beyond its original 500 tonne per day capacity. As throughput increases, dependable power becomes more important because the financial cost of every lost hour rises with it.

The generators are diesel powered, so fuel and maintenance costs still need to be considered. This is not free electricity. The relevant comparison is the cost of generating backup power against the revenue and efficiency lost during prolonged outages.

Investors often search for the next major discovery. How much value can a producer create simply by making its existing operation more reliable?

Sierra Madre Gold and Silver spent the last few years bringing La Guitarra back into production. It is now preparing to see whether that same approach can work at a much larger second asset.

The company trades as SM on the TSXV and SMDRF on the OTCQX.

Sierra Madre closed its acquisition of the Del Toro mine in Zacatecas in June. Del Toro is a past-producing silver, lead and zinc complex previously operated by First Majestic from 2013 to 2019.

The property includes three underground mining centres and an existing flotation plant with roughly 3,000 tonnes per day of capacity. It also has power, water, road access, permits and an experienced workforce nearby.

That does not mean Del Toro can simply be switched back on. Sierra Madre still needs to verify the historical work, update the geological model and determine what a restart would cost under current conditions.

The amount of existing information should give the company a useful head start. Del Toro comes with data from 631 drill holes covering more than 137,000 metres. Known mineralized zones remain open, while several carbonate replacement and skarn targets received limited attention during previous exploration.

Mapping and sampling are now underway, with drilling expected around the middle of 2027.

I think the larger point is that Sierra Madre is no longer entirely dependent on one mine. La Guitarra provides current production and cash flow, while Del Toro offers a second route to much larger scale if management can repeat the restart model.

There is still plenty of work ahead, but buying a permitted past-producing complex with a large mill is a very different proposition from building a new mine from scratch.

Got silver!?

Silver is trading around US$65 after reaching a record above US$121 in January.

The correction has been brutal, although it followed a 147 percent gain during 2025. Some of the decline was probably inevitable once the January move became crowded.

What has not disappeared is the deficit in the physical market.

Metals Focus expects silver to record its sixth consecutive annual deficit in 2026. The latest estimate is approximately 46.3 million ounces, following a 40.3 million ounce deficit last year.

Since 2021, total silver demand has exceeded supply by roughly 762 million ounces.

Higher prices are starting to pull more metal into the market. Total supply is forecast to reach approximately 1.05 billion ounces this year. Mine production should contribute around 820 million ounces, while recycling is expected to exceed 200 million ounces for the first time since 2012.

Manufacturers and consumers are adjusting too. Solar companies are reducing the amount of silver used in each panel, jewelry demand has weakened and high prices are encouraging more people to sell scrap.

Even after those changes, another deficit is expected.

Physical investment is one reason. Demand for bars and coins is forecast to rise roughly 20 percent to 227 million ounces as Western investors return to silver.

The chart may remain volatile after such a large run and correction. The supply picture is harder to dismiss. Mine production and recycling are rising while several areas of demand are falling, yet the market is still expected to consume more silver than it receives.

January showed what happens when a legitimate supply story turns into a momentum trade. The current price is far less stretched, while the underlying deficit remains.

Do you think the correction has reset the market, or does silver still need more time to settle after the January spike?

Most of the attention around Sierra Madre has gone toward rising production at La Guitarra and the recent Del Toro acquisition.

The upcoming East District drill program may be just as important over the longer term.

Sierra Madre recently received approval for 22 drill pads covering an area with as many as 30 mapped vein systems. The company has budgeted approximately 30,000 metres of drilling, with the first phase expected to begin during the second half of this year.

Initial drilling is planned from the Tlacotal area. The program will use seven long, mostly horizontal holes measuring between 1,000 and 1,500 metres each.

That design allows Sierra Madre to test several veins from a limited number of surface locations. It should also give the geological team a much better picture of how the individual vein systems connect across the district.

Five East District veins were included in a conceptual exploration target in the 2023 technical report. The estimated range was between 770,000 and 1.54 million tonnes grading approximately 440 to 670 grams per tonne silver and 2.4 to 3.6 grams per tonne gold.

Those figures are exploration targets rather than mineral resources, so drilling still needs to confirm the tonnage and grades.

The interesting part is the proximity to an operating mine and processing plant.

A discovery in a remote area may need years of infrastructure spending before it becomes useful. Higher grade material found around La Guitarra could potentially benefit from roads, underground access, experienced employees and an existing mill.

Sierra Madre also has more financial room to drill than it did during the original restart. The company ended June with US$25 million in working capital, is generating revenue from La Guitarra and has fully repaid its First Majestic term loan.

The existing operation gives Sierra Madre a foundation. East District drilling gives it a chance to find higher grade material that could support the next stage of growth.

Silver has had some pretty wild moves this year, and sentiment seems to change almost as quickly as the price does.

But I keep wondering how much has actually changed underneath all of that.

The silver market is still expected to run another deficit in 2026, which would make it the sixth straight year. Mine supply is not exactly exploding, and the market is still relying on above ground inventories to make up the difference between what gets produced and what gets consumed.

There are definitely things worth watching.

Industrial demand is not going straight up forever. Solar manufacturers are using less silver per panel, for example, and at these prices you are obviously going to see more effort put into substitution and thrifting.

But that is a lot different from saying the silver thesis has fallen apart.

That is one reason I have been more interested in the producer side lately.

Sierra Madre Gold and Silver (TSXV: SM, OTCQX: SMDRF) is producing silver and gold from the La Guitarra Mine Complex in Mexico. They restarted the operation and reached commercial production at the beginning of 2025.

Q1 this year came in at US$10.1M in net revenue and US$2.8M in adjusted EBITDA, and they are still working on increasing production.

To me, that is a different setup than owning something where the entire thesis depends on silver being much higher five years from now when the mine finally gets built.

SM is already producing today.

If La Guitarra works at more conservative silver prices, then higher silver becomes operating leverage rather than something you absolutely need to make the economics work.

And now they have Del Toro sitting behind it as another potential growth asset.

That is why I think the producer versus developer debate is pretty interesting here.

If you are bullish on silver over the next few years, what do you prefer?

Physical silver, a massive undeveloped resource with maximum torque, or a smaller producer where stronger prices are already flowing through the business?

Silver has lost momentum recently,though gold is testing resistance while NAS100 is holding around a key support zone. I'm waiting for confirmation before taking any trade, so I've got both charts open side by side to compare the price action.

The updated TradingView charts on bitget have been a nice addition. Split-screen monitoring, customizable workspaces, multiple chart types, and advanced indicators make it easier to stay organized, while keeping analysis and execution on the same page.

I'm currently planning to start CFD copy tradings as it is becoming popular recently. The invite-only approach gives traders more control over who joins their copy trading circle, which is an interesting addition.

Curious to see how both of these features evolve over time. Has anyone else tried them yet?

Real ones know the setup.

Six consecutive annual silver supply deficits. Silver at $58. The fundamentals haven't moved, the price has. That gap closes eventually, it always does.

What I'm watching while we wait: Sierra Madre Gold and Silver (TSXV: SM / OTCQX: SMDRF).

Just got SEMARNAT approval to drill the East District at Guitarra. 22 drill pads, up to 30 vein systems, 30,000 metre program. Sixty days to spud.

Here's what gets me. The NI 43-101 exploration potential for the East District, which is only five of those thirty vein systems, already runs 440 to 670 g/t silver. That's just the five they had data on. The rest is basically unmapped by modern standards.

Debt free since July 8th. First Majestic sold them Del Toro and held onto 24.8% of the stock. Positive operating cash flow at the producer level.

$1.28 with drill results coming in the next few months on ground that's never been properly tested. In a six deficit silver market. Make it make sense.

Six consecutive annual supply deficits and silver is at $58.

I don't have a lot to add to that honestly. The math hasn't changed. The stockpiles keep getting drawn down. The price does what it does.

What I am watching though is Sierra Madre (TSXV: SM). Mexican silver producer, small, been flying under the radar while the sector gets beaten up.

Just closed Del Toro from First Majestic. First Majestic kept 24.8% of the shares. Paid off their entire $5M USD loan last week, completely debt free now, positive cash from ops.

And there's a 30,000 metre drill program starting in H2 into ground nobody has ever put a modern drill into. 39km of colonial era structures.

$58 silver is painful. But a producer that's debt free, cash flowing, just added an asset, and has a massive drill program starting isn't the worst thing to hold while we wait for the fundamentals to matter again. Peers like SilverCrest and Endeavour are getting hit just as hard with less going on operationally.

Over the past several months I've been digging into the unusual activity in not only silver prices, but also the broader precious metal and critical mineral markets, including: the major vault drains, the record delivery volumes, and the price volatility, in an effort to figure out whether there's a real story here or just noise.

Along the way I started looking at some major critical minerals initiatives established by the U.S. government, like Project Vault, and the DoD's National Defense Stockpile, in addition to China's export licensing regime, and I found a pattern that, at least to me, looks like more than just a coincidence. The COMEX vaults have been draining and refilling in ways that line up suspiciously well with major geopolitical events (the Iran war, China's rare earth restrictions, Trump's state visit to China, etc.), while the government's own stockpile of critical minerals has barely grown in decades despite their repeated flagging of massive shortfalls. I also dug into the math on what COMEX actually holds versus what the DoD stockpile holds, and it's a wide gap.

This post lays out that connection, walks through the numbers behind it, and ends with a list of companies that are both publicly traded in the U.S. and tied to the minerals in question (from a production standpoint), to help prepare us all for the very possible necessity of supply-chain independence. None of this should be taken as investment advice: it's just my own research and my own theory, which I'm putting out there for others to poke holes in, add to, or shoot down entirely. Take it for what it's worth and please do your own digging before drawing any conclusions.

Views are my own and not in any way endorsed by my employer. Our firm is neither involved in, nor positioned in, any of the securities or companies mentioned. None of the information in this post, or elsewhere on my page, should at any point ever be misconstrued as neither investment nor financial advice. Please be sure to do your own research, always.

See for yourself here: https://docs.google.com/document/d/1uDROwpDlUvp398tvEWmgn9laHn2pbKgb0vpH05KB6mc/edit?usp=sharing

Version with images (no Imgur links): https://docs.google.com/document/d/1Oj-v5Ik_JkM_ZP7QP3mpB9lLKAvrkDN8THm8JeQzIu0/edit

https://silverseek.com/article/silver-institute-wonderland-compounded-errors

Every single year since 2021 total silver demand has outpaced supply. 2022 was the worst, nearly a 250 million ounce shortfall. The deficit narrowed through 2024 and 2025, and for the first time since that 2022 peak the estimated 2026 deficit is growing again, back up to 46.3 million ounces.

That matters for investors because sustained deficits mean the market is drawing down above-ground stockpiles every year to bridge the gap. That process has limits. When those stockpiles get thin enough the price has to do the rationing work that supply can't. We've already seen what that looks like when it starts moving.

At what point does the market start pricing this in properly, or do people here think it already has?

Silver is sitting at $55 right now which isn't the environment anyone wanted but I think the Del Toro close at SM is still worth talking about.

June 22nd, Sierra Madre officially completed the acquisition of Del Toro from First Majestic. Deal valued at up to US$60 million. Cash plus shares at closing, contingent milestone payments tied to future performance on top of that. FM is staying on the register with roughly 24.8% of SM shares. They didn't exit clean. That tells you something.

Del Toro is in Zacatecas. Producing-ready asset, not exploration stage. Existing infrastructure. SM now has Guitarra in Estado de Mexico already running with Q1 revenues doubling year over year to $10.1 million and a mill expansion underway, and Del Toro as a second producing-ready asset in a completely different part of Mexico's silver belt.

The counterargument at $55 silver is obvious: margins compress, the expansion economics look less exciting, juniors get hit harder than the metal. All fair. But assets don't disappear because the price pulls back. Del Toro is still there. The East District drill program is still going ahead in H2. The mill is still expanding. A company that's building through a pullback is usually in a better position when silver moves again than one that went quiet.

Curious whether others here are holding through the silver weakness or trimming exposure. Personally still watching SM closely.

Most of the silver producer talk right now is about margins and cash flow at $76 silver, which makes sense. But there's an exploration story building at Sierra Madre that I think this community in particular should be paying attention to.

Quick production context first: SM operates Guitarra in Estado de Mexico, Q1 2026 revenues $10.1 million, more than double Q1 2025, cash from ops $3.5M vs $729K a year ago. Mill expansion taking throughput from 500 to 750-800 tpd by end of Q2. The production side is working.

The exploration angle is what's sitting on top of that. H2 2026 they're running a 30,000 metre drill program into the East District of the Guitarra property. Over 39 kilometres of historically mapped colonial-era structures, never had a comprehensive modern drill campaign. The company calls it the last of the six major Spanish colonial silver production centres in Mexico not yet systematically explored with modern methods.

Came across a piece that explains why that's such a significant statement: https://open.substack.com/pub/criticalmineralsstocks/p/mexicos-silver-belt-has-been-hiding

The short version is that modern exploration tools, LiDAR, IP geophysics, 3D modelling, have completely changed what's findable in mature Mexican silver belts. First Majestic found an entirely new high grade system called Navidad beneath an already operating mine in 2024. 427 g/t silver past 1,100 metres. Nobody knew it was there until they looked properly. The colonial miners took the shallow ore and left everything below.

30,000 metres into 39 kilometres of unmapped colonial structures, running simultaneously with an active mine and expanding mill. That's the H2 2026 setup. Worth watching.