Authored by GoldFix 

The global silver market is tightening into a slow-motion short squeeze as physical supply vanishes, demand accelerates, and financial engineering replaces real metal delivery.

Summary:

Silver is entering the early phase of a structural short squeeze driven by physical scarcity rather than speculative excess. For decades, bullion banks arbitraged between long physical holdings in London and short futures on COMEX, profiting from carry trades supported by ample inventory.

That system is now breaking down as London's free float approaches depletion. Accelerating U.S. industrial demand, tariff pull-forward buying, growing ETF inflows, potential sovereign accumulation, and sustained physical withdrawals by China and India are draining available supply. With silver unable to be leased like gold and upstream production increasingly pre-sold to China, banks are rolling futures positions to defer delivery, expanding balance-sheet risk. Current stress reflects financial postponement, not yet full physical capitulation.