Silver Sprints to $91 as Global Supply Cracks and Geopolitical Tensions Explode by Amit Gupta, Kedia Advisory
Silver prices after bottoming out at $64.10 in early February, surged over 27% to hit $91, driven by aggressive US tariff threats and a weakening dollar. While industrial giants like solar manufacturers are desperately trying to "thrift" silver out of their designs to cut costs, investment demand is skyrocketing. With COMEX inventories hitting record lows and China restricting exports to protect its own tech industries, the market is facing a massive 5:1 paper-to-physical imbalance.
Key Highlights
* Price Explosion: Silver prices rallied 27% from February lows to hit $91 amid US tariff fears.
* Inventory Crisis: COMEX deliverable silver crashed to 88.2 million ounces, sparking "squeeze" warnings.
* China’s Lockdown: New export licenses in China have restricted 60% of the world’s refined silver supply.
* Sixth Deficit Year: Global markets face a 67-million-ounce shortfall, exhausting long-term reserves.
* The East-West Gap: Shanghai silver carries a $10 premium over London, pulling physical metal to Asia
It has been a wild ride for silver enthusiasts lately. After a shaky start to February that saw prices dip to $64.10, the metal caught a massive tailwind, screaming up over 27% to touch the $91 mark. This rally wasn't just a fluke; it was fueled by a toxic mix of "Washington uncertainty" and a sudden U.S. push for higher tariffs. When U.S. Trade Representative Jamieson Greer hinted that tariffs could jump to 15% or more, investors bolted toward safe-haven metals, leaving the U.S. dollar looking a bit thin in the process.
The "behind-the-scenes" data is even more dramatic than the price action. Over at the COMEX, readily deliverable silver stocks have plunged to under 90 million ounces—a staggering 75% drop since 2020. We are now looking at a situation where "paper" bets on silver outweigh the actual physical metal by a ratio of 5 to 1. To make matters tighter, China has essentially put a padlock on its exports. By implementing strict "strategic nationalism" licensing, they are keeping 60% of the global refined supply within their borders to fuel their own solar and EV sectors.
While the industrial side is feeling the pinch—with solar manufacturers pivoting to copper substitution to save money—the investment side is on fire. Silver ETFs saw a massive $2.44 billion inflow in a single week. Even though high prices are scaring off jewelry buyers in India, institutional players are scrambling for the physical stuff. Lease rates for silver have spiked to a record 8%, a clear sign of "delivery desperation." Between the shrinking inventories in London and the $10 premium in Shanghai, it’s clear the physical metal is migrating East, leaving Western exchanges struggling to keep up with the demand.
Finally, with a chronic six-year supply deficit and shrinking exchange vaults, silver is no longer just "gold’s restless cousin"—it’s a critical asset caught in a tightening global squeeze.
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