Millions have heard the familiar account of how the Hunt brothers pushed the price of silver from under $2 an ounce to more than $50 in an attempt to corner the market.
At their peak, the Texas oilmen controlled rights to a substantial portion of the world’s silver supply. Then, after exchanges abruptly changed margin rules, silver plunged from over $50 to about $11 an ounce.
Instead of reaping billions, two of America’s wealthiest families saw most of their fortune wiped out.
Before revisiting that saga, here are the latest developments shaping gold and broader markets.
Global Leaders Convene at Davos 2024
The World Economic Forum’s annual meeting in Davos, Switzerland, took place last week. Unlike a year ago, recession worries have eased for many participants, who now anticipate the Federal Reserve may start cutting interest rates over the coming year.
Study Attributes More Than Half of 2023 Inflation to “Greedflation”
A recent analysis by the Groundwork Collaborative points to a notable trend: more than half of last year’s inflation spike is linked to “greedflation,” where corporate profit-seeking materially contributes to higher consumer prices.
Bitcoin Drops 15% After ETF Launch
Bitcoin fell roughly 15% over two weeks following the debut of Bitcoin exchange-traded funds (ETFs). Some investors took profits after the ETF launch, driving prices down. On Tuesday, Bitcoin briefly dipped below $39,000, its lowest level since early December.
Julius Caesar Rewarded Soldiers with 200 Gold Coins
Between 58 and 50 BC, Julius Caesar led campaigns across regions that now include France, Belgium, and western Germany. After the campaigns, Caesar rewarded his soldiers with 200 gold coins each in recognition of their service.
What is the melting point of gold?
A. 912 degrees Celsius
B. 1,064 degrees Celsius
C. 1,794 degrees Celsius
D. 4,555 degrees Celsius
Scroll to the bottom of this email for the answer…
World Gold Council Report: China’s Gold Market in 2023
China experienced a mixed economic year, yet gold stood out as a strong performer. The World Gold Council’s report highlights improved wholesale demand, significant inflows into local gold ETFs, and steady purchasing by the People’s Bank of China during 2023.
Explore the dynamics behind China’s growing role in the global gold market.
Download the Report
The Hunt brothers’ silver episode has elements of drama: armed guards, secret transfers, and late-night flights. In the 1970s, the brothers accumulated massive holdings and moved substantial quantities of silver from New York to secure vaults abroad.
The Day the Hunt Brothers Capped the Price of Gold, Part II
By Mike Maloney
In April 1974, oil magnate Bunker Hunt visited the COMEX trading floor in New York. His presence paused the usual bustle; traders were struck by the large Texan in unassuming attire. Bunker publicly argued for owning tangible assets over paper money, foreshadowing his aggressive accumulation of silver.
By 1976 the Hunts had added roughly 20 million ounces to the 55 million ounces already stored in Switzerland and the United States. By summer 1979 silver had climbed to $8 per ounce—up from about $2 when Bunker began buying—and by autumn it had doubled to $16. With inflation and geopolitical instability on the rise, demand accelerated and silver hit $17.88 on October 3, 1979.
Exchanges including COMEX and the Chicago Board of Trade held only a fraction of the silver required to satisfy growing demand. Fearing default and market disruption, regulators and exchanges grew alarmed. The Commodity Futures Trading Commission (CFTC) urged restraint; the Chicago Board of Trade raised margin requirements and limited the amount of silver futures a trader could hold.
Bunker Hunt resisted. The U.S. Federal Reserve, concerned about speculative lending and the broader impact on currency confidence, pressured banks to stop financing highly leveraged positions. The Fed’s intervention reflected a deeper worry: surging prices of gold and silver signaled eroding trust in fiat currency, which the central bank sought to contain.
Historical context matters: after gold ownership had been restricted during the Great Depression and the Bretton Woods era ended in 1971, gold and silver increasingly competed with the dollar as stores of value through the 1970s. Facing stagflation, oil shocks, and mounting inflation, the dollar appeared vulnerable—and the Fed was prepared to act.
By the end of 1979 silver reached $34.45 per ounce. The Hunts and their partners controlled roughly 235 million ounces. In early January 1980 COMEX imposed new limits on futures positions and demanded liquidation of excess contracts. Silver peaked at $50 per ounce on January 21, 1980—at which point the Hunt holdings were valued at about $4.5 billion.
Gold also rose to record levels that day—$873 per ounce—heightening panic. COMEX, backed by the CFTC, restricted trading to liquidation orders only, effectively preventing new buying and initiating a sharp price reversal. Traders feared that if exchanges could alter silver rules midstream, they could do the same for gold—an implicit signal that regulators would take steps to protect the dollar’s credibility.
To counter rising inflation and speculative excess, the Fed raised the federal funds rate aggressively, at one point to near 20%, tightening credit and reducing leverage. Silver and gold prices retreated as borrowing costs soared.
The Hunts continued buying but faced mounting margin calls as futures positions turned against them. Unable to secure further loans when lenders prioritized compliance with regulators, they were forced into liquidation. On March 27, 1980—“Silver Thursday”—silver plunged from $15.80 to $10.80 per ounce, triggering broader market turmoil amid fears the Hunts would sell other assets to cover losses. Although some physical silver remained profitable, the Hunts’ futures losses were catastrophic, leaving them roughly $1.5 billion in deficit.
The Fed organized bank support to prevent systemic fallout, and a consortium provided credit so the Hunts could meet obligations. Legal and regulatory actions followed: Bunker Hunt declared personal bankruptcy, settled tax claims with the IRS, and faced fines from the CFTC. While courts and public opinion branded the Hunts as market manipulators, later investigations revealed conflicts of interest among some exchange board members who held short positions—underscoring the complexity of the episode.
Two enduring lessons arise. First, financial education and timing matter: understanding market cycles and recognizing when to exit leveraged positions can preserve wealth. Second, the episode highlights the risks of paper-based speculative exposure versus holding physical metal. The Hunts’ downfall was driven largely by losses in futures contracts, not by the physical bullion they stored. The story illustrates how market rules and regulatory interventions can change the playing field, often with severe consequences for highly leveraged participants.
Buy Gold or Silver Today
That’s it for this week’s GoldSilver Nuggets. We’ll return next week with more insights and updates on gold and silver markets.
Best,
Brandon S.
GoldSilver
What is the melting point of gold?
A. 912 degrees Celsius
B. 1,064 degrees Celsius
C. 1,794 degrees Celsius
D. 4,555 degrees Celsius
Answer – B. 1,064 degrees Celsius
Gold melts at 1,064 degrees Celsius, the temperature at which it transitions from solid to liquid. This property makes gold highly suitable for jewelry and a variety of industrial uses, including electronics, aerospace, and medical applications.