As the silver price rose from approximately $30 to $120 and then sharply declined to around $50, investors likely sold large amounts of physical silver. Realistically, this could have amounted to 30–100 million ounces, of which approximately 20–60 million ounces may have ended up with industrial users. It is possible that this temporarily stabilized the physical market and delayed the acute shortage by roughly one year.
The market gained some breathing room and may have experienced one final significant wave of physical silver supply before the paper COMEX market comes under much greater pressure.
Let’s not forget that Asia has recently launched new physical precious metals markets. Singapore’s Abaxx Exchange now offers physically delivered gold and silver futures, while Hong Kong is building a new system for the physical settlement of gold.
The pressure on the physical silver market continues to grow
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