Silver has been trading at a significant premium on the Shanghai market compared with Western markets for several months. The premium is currently around 12%, which is far from a normal market condition.
This persistent premium points to sustained strong physical demand for silver in China, combined with tight physical supply. Buyers are willing to pay substantially more than the COMEX price, suggesting that physical silver is being valued more highly in the Asian market than implied by futures prices.
A premium of this size lasting for several months is not typical of a well-balanced market and indicates an ongoing imbalance between the supply and demand for physical silver.
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