The Silver market is facing a Perfect Storm as data from the Shanghai Futures Exchange confirms the physical shortage is becoming more severe, despite prices being at record highs.
🔷 Data from CEIC is raising alarming signals:
January 23: Inventory reached 581.09 tons.
January 26: Dropped to 573.81 tons.
More than 7.2 tons of Silver have been withdrawn from the warehouse in just 3 days including the weekend.
🔶 Under normal market conditions, when prices rise, exchange inventories typically increase as speculators bring goods to sell for profit.
The strange paradox, prices rise but inventories decline. This is proving one thing: physical demand is swallowing up all available supply.
Currently, factories and sharks in China are rushing to withdraw real Silver to their private stocks instead of holding paper contracts, as they are extremely concerned about potential global supply chain disruptions.
🔷 This inventory bleed is putting extreme pressure on Short Sellers:
When the amount of Silver in exchange inventories drops to alarming levels, the Short side will not have enough physical goods to deliver when contracts expire.
This leads to a chain reaction forcing the buyback of contracts at any price to close positions.
This is the fuel that could cause Silver prices to spike dramatically in a very short time.
The loss of 7 tons of Silver withdrawn from the market is not a large number, but the trend of continuous net withdrawals at price peaks confirms one thing:
This is not a speculative bubble, but a real shortage crisis. The market should prepare for even more violent price fluctuations!
This article is for reference only and is not investment advice. Please read and consider carefully before making a decision.