Loading ...I asked my phone. Maybe they don’t have it to sell. Playing the you can’t buy what we don’t have Might be the same here in a few hours.
Silver isn’t “not trading” in London; rather, the physical spot market is extremely tight, leading to a massive premium for immediate metal (backwardation) as massive outflows to ETFs and high industrial demand have emptied vaults, causing record borrowing costs, a “squeeze,” and prices spiking far above paper markets, showing severe physical supply stress despite large COMEX stockpiles. This situation makes immediate physical delivery difficult and expensive, driving prices up dramatically as everyone wants the metal now.
Key Reasons for the London Silver Squeeze:
- ETF Inflows: Over 100 million ounces of silver flowed into silver-backed Exchange Traded Funds (ETFs), removing physical metal from the market.
- High Industrial Demand: Strong needs from solar panels, electronics, and EVs, coupled with potential U.S. critical mineral concerns, are pulling metal out.
- Supply Shock: Heavy shipments to the U.S. and India in October depleted London’s free-float inventory.
- Backwardation: The spot price is significantly higher than future prices, a sign of acute physical scarcity, not typical market conditions.
- Lease Rates: The cost to borrow physical silver has surged to record highs (over 11-30%), showing intense demand for immediate metal.
What It Means for Trading:
- Physical vs. Paper: The physical market (London OTC) is screaming for metal, while paper markets (like COMEX) seem disconnected, highlighting a fundamental imbalance.
- Price Volatility: The shortage triggers sharp price spikes as short sellers scramble for scarce metal, creating a classic squeeze scenario.
- Global Impact: This tightness affects other markets, with U.S. COMEX silver potentially needing to flow back to meet London’s demand, though tariffs and logistics create friction