Panda Traders

Silver just tagged $120 up ~450% in the last 2 years and it’s now one of the strongest performers.
This move isn’t just hype. It’s supply pressure + the paper market getting tested at the same time.
Here’s what’s actually behind it
💥THE MARKET HAS BEEN IN A REAL SUPPLY DEFICIT FOR YEARS
This isn’t a one-month issue. Over the last 5 years, global usage has been higher than global production.
Total deficit: ~678M ounces.
That’s close to a full year of mine supply missing from the system.
💥REFINED SUPPLY GOT TIGHTER
A major portion of refined supply has been harder to access due to tighter export flows and licensing/restrictions in parts of the supply chain.
Result: fewer bars available globally → higher physical premiums → buyers compete harder for metal.
💥INDUSTRIAL DEMAND IS GROWING FAST ⚙️
Silver isn’t only a “store of value” metal — it’s a critical industrial input.
A) Solar demand
Silver is used for conductivity inside panels. As solar capacity expands, silver demand rises. Estimates suggest solar silver demand could climb from ~200M oz/year toward ~450M oz/year by 2030.
B) Data centers, AI, and electrification
More data centers, upgraded grids, and more electronics = more high-performance conductivity demand. In many applications, silver is hard to replace without sacrificing efficiency.
💥THE PAPER MARKET IS MUCH BIGGER THAN THE REAL METAL 🧾
Most silver exposure is via contracts, not delivery. Paper-to-physical leverage is often cited around 350:1.
This structure works until more participants want physical settlement.
When physical demand rises: • shorts struggle to source metal
• buybacks accelerate
• volatility increases
• forced covering can create a feedback loop
💥LEASE RATES + BACKWARDATION FLASHED PHYSICAL STRESS
A) Lease rates
Borrowing costs for physical silver are usually low. Recently, lease rates jumped near ~39% annualized a signal that sourcing metal became difficult.
B) Backwardation
Spot pricing above futures can appear when buyers want metal now, not later. Silver backwardation reached levels not seen since around 1980 during some periods — another sign of tightness.
💥REFINING BOTTLENECKS MADE IT WORSE
Around 9.7% of global refining capacity went offline in late 2025. Even when silver exists, it can’t always be processed into usable form quickly.
💥ETFs PULLED MORE METAL OUT OF CIRCULATION
ETFs hold real bars. About 95M ounces flowed into silver ETFs in early 2025 alone, reducing available supply for industry and delivery.
💥SILVER BECAME A “STRATEGIC” MATERIAL
In Aug 2025, the U.S. added silver to its Critical Minerals List - shifting the narrative from “just a commodity” toward “strategic resource.”
💥WHY SILVER MOVES FASTER THAN GOLD
Gold markets are deeper. Silver is thinner. When demand rises and supply is tight, silver can move faster with sharper swings.

Silver didn’t move for one reason. It moved because of:
• multi-year deficits
• refined supply tightening
• rising industrial demand
• heavy paper leverage vs limited physical
• lease rate spikes + backwardation
• inventory/processing stress
• ETF absorption
• strategic classification
The market stopped being driven only by paper pricing.
It started reacting to physical availability.
Not financial advice. Manage risk. ⚠️

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