As of late December 2025, silver has been the superstar of precious metals, surging around 167% year-to-date from about $29-30 per ounce at the start of the year to fresh records above $77-79 per ounce. That's absolutely massive—far outpacing gold's strong gains. If you've ridden this wave, congrats! But behind the excitement, there are some deep signals and risks worth watching closely.
What's Driving the Surge?Sure, some of it is tied to gold's rally and safe-haven buying amid geopolitical tensions and a weaker dollar. But a big part is China's decarbonization push and the global shift to green energy.China (the world's #2 oil consumer) is cutting carbon emissions aggressively, reducing oil demand (peak expected around 2027). This has helped flip a long-standing trend: silver prices per unit now exceed crude oil.
🚨BREAKING: Silver prices are exploding due to a severe global supply shortage.
The physical market can no longer meet soaring demand.
Here is what is actually going on 👇
1. China is changing the rules.
Starting January 1, 2026, China will restrict silver exports.
To export silver, companies will now need government licenses.
Only large, state approved firms qualify:
- At least 80 tonnes of annual production
- Around $30 million in credit lines
This effectively blocks small and mid size exporters.
China controls roughly 60–70% of global silver supply. When China tightens exports, global supply drops immediately.
This is the same tactics China used with rare earth metals.
2. The silver market was already short supply.
Silver has been in a structural deficit for 5 straight years. That means demand is higher than supply every single year.
For 2025:
- Global demand: 1.24 billion ounces
- Global supply: 1.01 billion ounces
That is a gap of 100–250 million ounces. And this gap is expected to get worse after China’s export limits.
Mining supply is not growing:
Silver mining is mostly a by product of copper and zinc mining.
New mines take 10+ years to build, Ore quality is falling, Recycling is not enough to fill the gap.
There is no quick fix here.
3. Physical silver inventories are collapsing.
This is where it gets serious.
- COMEX inventories are down 70% since 2020
- London vaults are down 40%
- Shanghai inventories are at 10-year lows
At current demand, some regions hold only 30-45 days of usable silver.
This is why physical premiums are exploding.
In Shanghai:
- Physical silver trades at $80+/oz
- COMEX prices are much lower
This price gap means buyers are paying extra just to get real silver.
4. Paper silver is completely disconnected from reality.
There is an extreme imbalance between paper silver and real silver.
The paper to physical ratio is around 356:1.
That means:
- For every 1 ounce of real silver
- There are hundreds of paper claims
If even a small percentage of buyers ask for real delivery, the system breaks.
Markets understand this. That is why price moves are becoming vertical.
5. Industrial demand keeps rising.
Silver is not just a safe haven metal.
It is critical for:
- Solar panels
- Electric vehicles
-AI Data centers and Electronics
- Medical devices
Industrial use now makes up 50-60% of total silver demand.
There is no substitute for silver in many of these uses.
Banks and institutions are reacting to:
- Supply limits
- Physical shortages
- Paper market risk
Silver is not rallying because of fear.
It is rallying because a real supply squeeze is playing out in real time.
Persistent supply deficits (silver is mostly a byproduct of other mining) plus record industrial and investment demand have created the perfect storm. Silver's total market cap is now around $4-4.5 trillion, making it one of the world's most valuable assets—surpassing companies like Apple at times.Will It Keep Rising?Short-term: Probably yes, or at least hold these highs into 2026. Real industrial needs (no quick substitutes) and safe-haven flows are strong. Some analysts see $80+ soon if deficits continue.But caution—silver is famously volatile. History shows these booms can bust fast.
Take the infamous Hunt brothers in the late 1970s/early 1980s. Heirs to an oil fortune (Nelson Bunker Hunt and William Herbert Hunt), they believed fiat money was doomed and hoarded silver to hedge inflation.
Started buying at ~$1.50-2 per ounce.
Used heavy leverage, futures, and physical hoards—eventually controlling over 100 million ounces (a huge chunk of world supply).
Drove prices to ~$50 per ounce by early 1980.
Chaos ensued: industrial shortages, skyrocketing jewelry costs, even burglaries for silver items.
Then regulators intervened (new rules limiting margin buying). On March 27, 1980—"Silver Thursday"—prices crashed over 50% in a day, from ~$21 to $10.80.
The brothers faced massive margin calls, turned billions in paper profits into ~$1.7 billion losses, filed bankruptcy, got fined millions, and were banned from commodities trading for life on manipulation charges.The family bounced back though—the broader Hunt empire (oil, real estate, sports) endures. Branches own the Kansas City Chiefs and other teams, with family net worth still in the billions.
Similar quick reversals happened post-2008 crisis when loose money pushed silver near $50 again before a sharp drop.Silver's byproduct supply makes it prone to wild swings from speculation or demand spikes.
The Deeper Warning Experts like Robert Kiyosaki see soaring precious metals as a "no-confidence vote" in fiat currencies, governments, and fiscal policies—high debt, money printing, distrust pushing people to "real" assets immune to manipulation.This rally screams growing systemic distrust.
My Take
Short-term, silver could grind higher or consolidate with strong fundamentals. For exposure, consider miners or ETFs for leverage without full physical/futures risk. Long-term: Stay vigilant. Rallies like this can collapse quickly if sentiment shifts or rules change. Diversify, don't chase tops, and watch for overextension.What do you think—is 2025's run built on solid demand, or heading for a Hunt-style correction?
@TigerObserver @Daily_Discussion @Tiger_comments @TigerPM @TigerStars
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