2025-12-28 08:21:29

Recently, the white silver market has indeed been quite aggressive, but behind this isn't some sudden surge in industrial demand. To be honest, it's a classic short squeeze battle in the futures market!

Let's look at the data first. The global annual silver production is about 27,000 tons, with industrial applications accounting for 23,000 tons. From the supply side, there is no serious shortage at all. The real problem lies in the futures market—COMEX, London, and domestic spot inventories combined are only enough to meet global demand for half a month. But that's not even the most outrageous part; short sellers are daring to sell short positions several times larger than the available inventory.

In previous years, everyone knew the market rules: futures are settled in cash upon expiration, and no one actually delivers physical goods. This time, the bulls broke this default agreement—demanding physical delivery directly. The shorts were stunned; with insufficient inventory, they had to buy at high prices to deliver, pushing prices higher and higher, creating a vicious cycle.

Why didn't gold experience the same situation? The size determines everything. Gold's market value is nearly $30 trillion, a massive entity capable of absorbing large capital inflows. Silver, on the other hand, has a market value of only $3 trillion. This smaller size can't withstand such turbulence. When large funds flood into this small pool, prices are pushed through the ceiling—this is a typical capital spillover effect.

Looking deeper, this surge essentially reflects concerns about the credibility of the US dollar. Safe-haven funds are flowing out of "large-cap stocks" like gold and into "small-cap stocks" like silver. Coupled with the short squeeze in the futures market, a perfect storm has formed. When will this madness subside? Either when shorts are completely wiped out or when longs take profits. But once trust is broken, prices are hard to return to previous levels.

So don't expect to get rich by digging out old silver bracelets from your house; this is clearly a game for big funds. Retail investors might as well watch for fun.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

25 Likes

Reward
25
7
Repost
Share

Comment

0/400

BlockchainBrokenPromise

· 2025-12-31 08:13

Damn, this is where the funds couldn't find a place to go, so they couldn't fit into gold and had to be pushed into silver, and it just blew up directly.

View OriginalReply0

GasOptimizer

· 2025-12-30 03:47

This wave of silver is really a capital game; retail investors entering are destined to be cut like chives. --- The short squeeze battle was well played; the shorts truly didn't expect the bulls to dare to take physical delivery. --- The small pool can't hold large capital; this logic should have been understood long ago. --- Is the US dollar credit collapsing? That’s probably the real reason behind the silver surge. --- Inventory is only enough for half a month’s use; shorts have sold multiple times the short positions, which is utterly outrageous. --- Stop watching the excitement; this is the harvest time for the big players. --- Gold can absorb the impact, but silver is directly pushed through the ceiling—there's too much difference in scale. --- After trust is broken, prices can't go back; after this wave, silver will have to fall. --- It's better not to take out silver bracelets from home; this isn't our game. --- The default agreement in the futures market has been broken; the bulls' move was brilliant.

View OriginalReply0

ChainSherlockGirl

· 2025-12-30 01:54

The feeling of being dominated by a slaughterhouse as a bear, how hopeless haha

View OriginalReply0

BuyHighSellLow

· 2025-12-28 08:51

If you force an air battle, you will force an air battle, anyway, we retail investors can't eat meat, have fun

View OriginalReply0

Ser_Liquidated

· 2025-12-28 08:51

Basically, it's just funds wildly harvesting retail investors in this small pool of silver; retail investors entering are just being fed to the wolves.

View OriginalReply0

On-ChainDiver

· 2025-12-28 08:42

Hey, this short squeeze battle is truly exciting. They dared to sell several times the short positions with half a month's inventory, the bears really messed up this time.

View OriginalReply0

MevShadowranger

· 2025-12-28 08:34

Small pools of capital entering large funds—that's destructive power. Silver has been played out as a "small-cap stock."

View OriginalReply0