Just a few hours before Friday’s sell-off, silver was trading above $70 an ounce.

Then Kevin Warsh spoke at Jackson Hole.

Warsh signaled that inflation remains a problem and that the possibility of another interest-rate hike is still on the table. Financial markets reacted quickly. The dollar strengthened, U.S. Treasury yields rose, and precious metals moved sharply lower.

Gold fell as much as 3% during the day, while silver dropped roughly 4%.

Within just a few hours, a substantial part of the previous gains had disappeared.

Yet during those few hours, practically nothing changed in the long-term story for physical gold and silver.

And moves like this are exactly what keep bringing me back, after years of following the silver market, to a much more uncomfortable question:

Who Really Sets the Price of Silver?

Not solar-panel manufacturers. Not miners. Not people buying coins and bars. And most of the time, not buyers who actually want to take delivery of a physical ounce of metal.

The short-term global price is determined primarily in financial markets, where contracts representing enormous quantities of silver can be traded within seconds.

As of August 4, twenty reporting banks on COMEX held 47,592 short futures contracts against only 14,762 longs. Bank short positions represented 42.5% of total open interest.

And according to the latest CFTC data as of August 25, the eight largest traders controlled 47.7% of the gross short side of the market.

But even more important is the history.

Manipulation of precious-metals futures is not an internet theory. U.S. courts, regulators, and the Department of Justice have already established that it has happened.

Silver Manipulation Is Not a Theory. It Has Been Proven

The debate around silver manipulation is often presented as if two groups are standing against each other.

On one side, the “conspiracy-minded silver investors.”

On the other, a supposedly perfectly functioning financial market.

But the actual history is much less comfortable.

In 2020, JPMorgan agreed to pay more than $920 million in connection with unlawful trading in precious-metals and U.S. Treasury markets.

The U.S. Department of Justice described tens of thousands of instances in which traders placed orders they never intended to execute. The purpose was to create a false impression of supply or demand and influence the behavior of other market participants.

That is spoofing.

A trader can, for example, create the appearance of enormous selling pressure by placing large sell orders in the order book. Other algorithms and traders see that apparent “supply” and react to it.

The price moves.

The fake orders are then canceled, while the real trade is executed on the other side of the market at a more favorable price.

Another part of the JPMorgan case is even more interesting.

The Department of Justice said that in some cases the trading was designed to intentionally trigger or defend price barriers connected to options positions held by the bank.

At that point, this is no longer an abstract debate about whether someone might be able to influence the price.

It is documented conduct specifically designed to affect the price.

And JPMorgan was not the only case. The Department of Justice later reported convictions involving former traders from institutions including JPMorgan, Bank of America/Merrill Lynch, Deutsche Bank, Bank of Nova Scotia, and Morgan Stanley.

That is why I find it strange when the very question of precious-metals manipulation is still automatically dismissed.

We are not debating whether manipulation has ever existed. We know it has.

The much more interesting question is how much influence the structure of this market may still have on price today.

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The Price Is Not Set at the Mine. It Is Set in the Futures Market

This is where the core of the problem lies.

When an industrial company needs physical silver, someone has to mine it, process it, refine it, transport it, and deliver it.

All of that takes time and money.

A futures contract works completely differently.

One standard COMEX silver futures contract represents 5,000 troy ounces of silver. As of August 25, the CFTC reported open interest of 113,801 contracts.

Enormous price exposure can therefore be created electronically without a single physical silver bar moving at that moment.

That futures price then becomes the benchmark for practically the entire market.

A dealer selling physical silver uses the spot price.

A refinery watches it.

An investor watches it.

A miner watches it.

The media watch it.

Yet that price signal can originate in a market that is fundamentally financial in nature.

This is where one of the biggest weaknesses in the current price-discovery system lies.

Financial supply of silver can be created almost instantly. Physical supply cannot.

When a large volume of sell contracts hits the futures market within a short period of time, the price can react immediately. But a mine cannot produce even one additional ounce during that same hour.

Physical supply and paper supply therefore do not operate in the same way.

Yet it is the paper market that determines the price used for physical metal.

To me, this asymmetry is one of the most important parts of the entire story.

The structure of the market itself gives large participants with sufficient capital an extraordinary ability to influence the short-term supply and demand reflected in price.

Banks and a Handful of the Largest Traders Control a Huge Share of the Short Side

And this brings us to the current CFTC data.

In my view, these numbers are difficult to ignore.

Source: CFTC.

Two different sets of statistics point toward a very similar picture.

Swap dealers hold more than twice as many short contracts as long contracts.

Banks as a group hold more than three times as many short futures as long futures.

And just eight of the largest traders account for almost half of the entire gross short side of COMEX silver futures.

I consider this concentration far more important than the absolute number of short contracts.

If short positions were evenly distributed among hundreds or thousands of independent participants, the situation would look very different.

But that is not what we see.

The four largest traders alone hold 31.6% of gross short positions. The eight largest hold 47.7%.

That means a relatively small number of participants carry extraordinary weight on one side of the market from which the world takes its benchmark silver price.

It is completely legitimate to ask how this level of concentration affects price discovery.

Especially in a metal where we already have historically documented cases of manipulation taking place specifically in the futures market.

Why the Price Can Be Pushed Down Faster Than the Physical Market Can Change

Friday’s trading was a useful reminder of just how quickly this entire mechanism can operate.

Only a few hours before the sell-off, silver was above $70.

Then Kevin Warsh gave his speech at Jackson Hole.

Warsh warned that inflation remained a problem and that another rate increase was still possible. The dollar began strengthening, Treasury yields moved higher, and precious metals fell sharply.

Gold dropped almost 3%, while silver fell around 4%.

That was the immediate trigger for Friday’s move.

But what changed in the physical market during those few hours?

Practically nothing that would justify such a rapid change in price.

Global mines did not suddenly begin producing 4% more silver within a few hours.

Industrial demand did not fall 4% during the afternoon.

The six-year deficit did not disappear.

Inventories were not suddenly replenished with tens of millions of new ounces.

The long-term story for physical gold and silver remained the same. What changed were the expectations of the financial market.

And that is exactly why I believe it can be misleading to explain large silver price moves purely through the traditional view of physical supply and demand.

Silver actually has two forms of supply.

One is physical.

It comes from mines, recycling, and existing above-ground inventories.

The other is financial.

It comes through futures, options, swaps, and other derivative positions.

In the short term, the second can matter far more for the price than the first.

Friday’s sell-off demonstrated this very clearly. One speech changed expectations around interest rates, financial capital reacted immediately, and the global silver price fell several percent within hours.

The physical balance of the metal itself remained practically unchanged.

Large sell orders also do not have to move the price only through their direct impact. They can trigger stop-losses, algorithmic selling, and the liquidation of other leveraged positions.

The original move can therefore begin reinforcing itself.

Then there are margin requirements. If sharp volatility leads to higher collateral requirements, some leveraged investors must either provide additional capital or close their positions. Further selling can follow without any change whatsoever in the physical supply of silver.

That is why, during sharp silver sell-offs, I look beyond the macroeconomic trigger and also watch when the move began, futures volume, what happened to open interest, and which groups changed their positions.

The Physical Market Is Starting to Push Back Against the Paper Market

This is where 2026 becomes particularly interesting.

The paper market can create enormous quantities of contracts.

But it cannot manufacture physical silver.

And after several years of deficits, the physical market is much tighter than it used to be.

The Silver Institute expects 2026 to be the sixth consecutive year of market deficit. The latest World Silver Survey estimates this year’s deficit at roughly 46.3 million ounces, with the cumulative deficit over the full six-year period reaching approximately 762 million ounces.

The Silver Institute also described an exceptional liquidity squeeze in the London physical market during its assessment of 2025, which led to a sharp rise in lease rates.

If the physical market were perfectly supplied and metal were available practically without restriction, why did we see this level of stress in the financing and lending of physical silver?

A similar signal is now coming from Asia.

In India, restricted imports contributed to a shortage of available silver, with local premiums reaching roughly $6.50 per ounce above the global price in July.

China shows another divergence.

As of August 28, the Shanghai Gold Exchange Ag(T+D) benchmark was trading at approximately $77.35 per ounce after conversion, while the Western benchmark price was significantly lower. The difference exceeded 12%.

The same physical metal is still trading at significantly different prices in different parts of the world.

This is where paper control of the price begins to face a problem.

If physical metal is abundant, arbitrage should naturally compress large price differences.

But if metal is not easily available, that arbitrage cannot continue indefinitely.

A paper contract can be created with a click.

Thousands of physical tonnes of silver cannot.

Where I Think the System Could Reach Its Limit

I do not believe silver manipulation will end because one day a regulator suddenly announces that the market will be perfectly fair from tomorrow onward.

History gives me little reason to be that optimistic.

If the current system ever changes fundamentally, I believe it will come from an entirely different direction.

From the physical market.

As long as enough real metal can be delivered to those who demand it, the futures market can continue functioning as the primary center of price discovery.

The problem begins when the paper price stops matching the price at which physical silver is actually available.

We are already seeing some early signs.

Six years of cumulative deficits.

Stress in London.

High regional premiums.

Significantly higher prices in parts of Asia.

And against all of that, a futures market where twenty banks hold 42.5% of open interest in gross short positions, while the eight largest traders represent almost 48% of the short side.

This is the combination I will continue watching.

• concentration of short positions among the largest traders,

• the Bank Participation Report and changes in bank short positions,

• open interest during sharp price movements,

• COMEX registered inventories and physical deliveries,

• London lease rates,

• prices and premiums in China and India,

• and the continuation of the structural deficit.

If the silver price declines while physical premiums, lease rates, or regional price differences begin rising at the same time, that would be one of the strongest signals to me that the paper price and physical reality are once again diverging.

And the longer that divergence persists, the more interesting the situation becomes.

Spoofing can be done.

Futures contracts can be created.

Enormous short positions can be held.

The price can be pushed in one direction or the other in the short term.

But there is one thing the financial market cannot create: a physical ounce of silver.

And that is why I believe the real limit to any long-term manipulation of the price will not be a regulator, a court, or another fine imposed on a major bank.

It will be the moment when enough buyers stop wanting paper exposure and begin demanding actual metal.

At that point, what matters will no longer be how many short contracts can be created. What will matter is how much silver can actually be delivered.

Over the course of just a few days in August, something happened around one of China’s largest gold groups that, in my view, deserves far more attention than the market has given it so far.

And it matters because China’s Gold Market is becoming increasingly important to physical gold flows and global price discovery.

First, the United States added Shandong Gold Mining, Shandong Gold Smelting, and Xinjiang Jinchuan Mining to a list under the U.S. UFLPA law. Two days later, the LBMA suspended Shandong Gold Smelting from its lists of approved gold and silver refiners. Then, on August 13, COMEX followed by restricting new registrations for physical delivery of gold and silver produced by the refinery from August 5, 2026 onward.

At first glance, this may look like a regulatory issue involving a single Chinese refinery.

But when viewed alongside what Hong Kong and the Shanghai Gold Exchange are building at the same time, the story begins to look very different.

On the Western side, new barriers are emerging for certain Chinese gold flows. At the same time, China is building infrastructure that allows larger amounts of physical metal to be stored, traded, and settled within its own financial system.

To me, that is more important than the Shandong Gold case itself.

The real question is where a specific gold bar is accepted, where it can be used to settle a transaction, and how freely it can move through the global market.

And this is where a wider gap between the Western and Chinese physical gold markets could gradually begin to emerge.

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How U.S. Restrictions Are Reshaping China’s Gold Market

The U.S. decision took effect on August 3. The United States added Shandong Gold Mining, Shandong Gold Smelting, and Xinjiang Jinchuan Mining to the UFLPA Entity List.

UFLPA stands for the Uyghur Forced Labor Prevention Act. Put simply, it is a U.S. law designed to restrict imports of goods that may be connected to forced labor in China’s Xinjiang region.

When a company is placed on this list, it does not mean its gold suddenly ceases to exist or that nobody anywhere in the world can buy it. But access to the U.S. market becomes considerably more difficult.

Shortly afterward, the LBMA — London Bullion Market Association — responded as well.

The LBMA sits at the center of London’s wholesale gold and silver market. For an ordinary investor, it may seem somewhat removed from everyday bullion investing, but its importance is enormous. Among other things, it establishes the rules that determine which refiners and bullion bars are accepted within the London system.

From August 5, 2026, Shandong Gold Smelting was temporarily suspended from the Gold and Silver Good Delivery Lists.

The term Good Delivery is worth explaining. It is a market standard that determines which refiners and which bullion bars meet the requirements of the large professional precious-metals market.

If a refinery is on this list, its bars have a much easier path into the London system and can be more readily accepted by banks and other major institutions.

The LBMA also launched a review of the case. Shandong Gold has therefore not been permanently removed. The suspension remains in place while the situation is being reviewed.

Then came COMEX.

COMEX is the U.S. market where futures contracts on gold, silver, and other commodities are traded. A futures contract is essentially an agreement to buy or sell a specified quantity of an asset in the future under predetermined terms.

Most of these contracts do not end with physical delivery, but the ability to make actual delivery remains an important part of how the system functions.

On August 13, COMEX announced that gold and silver produced by Shandong Gold Smelting from August 5 onward would no longer be eligible, until further notice, for new registration for physical delivery against the relevant futures contracts.

Metal produced before that date did not lose its eligibility.

And this detail is what I find particularly interesting.

A gold bar produced on August 4 and an almost identical bar produced on August 6 can have the same purity, the same weight, and the same physical properties.

Yet they may no longer have the same market acceptability.

Same Gold, but Not Necessarily the Same Route Through the Market

This brings us to a part of the physical gold market that many ordinary investors rarely think about.

Gold may be gold, but within the wholesale financial system, not every bar is automatically equally usable.

The London market commonly uses gold bars weighing around 400 troy ounces, or roughly 12.5 kilograms. To circulate smoothly between large banks and institutions, they must meet specific standards covering areas such as purity, weight, markings, and origin.

This standardization creates what is known as fungibility — in simple terms, interchangeability.

If two bars meet the same recognized standard, one can effectively substitute for the other in a transaction.

Regulatory restrictions, however, can weaken that interchangeability.

That is why I would not describe the Shandong Gold suspension as evidence that “gold is running out” or that the London or American system is collapsing.

Something else is more interesting.

The physical metal can continue to exist while the number of places where it can be used without additional complications begins to shrink.

What can matter includes:

• which refinery produced it,

• when the bar was produced,

• which exchange it is intended for,

• whether it meets the required standard,

• whether its origin is affected by specific regulations.

On COMEX, you may sometimes hear the term warranting. Essentially, it means registering specific metal in an approved warehouse so that it becomes eligible for physical delivery against an exchange-traded contract.

This is where we can begin to see the first signs of market fragmentation.

We do not need to see two dramatically different global gold prices.

It may be enough for one bar to circulate freely in Shanghai while facing restrictions in London or New York.

The metal has not disappeared. Only the map it is allowed to travel across has changed.

Hong Kong and Shanghai Are Building Their Own Infrastructure

This story would be far less significant if nothing were changing on the Chinese side of the market.

But quite a lot is changing.

On July 7, 2026, Hong Kong began trial operations of a centralized gold clearing and settlement system.

The word clearing may sound technical, but the principle is simple.

When two financial institutions trade with each other, someone needs to keep track of who owes what, who must deliver the money, who must deliver the gold, and whether the transaction has actually been completed.

Clearing organizes these obligations. Settlement is the point at which the money or physical metal is actually transferred.

The more efficient your own clearing and settlement infrastructure becomes, the less dependent you are on somebody else’s system.

Hong Kong also launched the first phase of a physical-delivery connection with the Shanghai Gold Exchange.

The Shanghai Gold Exchange is much more focused on physical metal than many Western futures markets, and China has long used it as one of the central parts of its domestic gold market.

The new connection is intended to make it easier to move and use bullion inventories between Shanghai and Hong Kong.

Hong Kong is also working to expand vaulting capacity, support additional gold ETFs, further develop futures markets, and build its own gold reference price known as HAU.

When vaults, physical delivery, exchange-traded products, clearing infrastructure, and a local price indicator are being developed at the same time, this is no longer just another place to trade gold.

It is becoming a more complete gold ecosystem.

The Hong Kong government has also said that it wants to increase gold storage capacity to more than 2,000 tonnes within three years.

If this infrastructure is actually used, China and Hong Kong will have far greater capacity to keep physical gold within their own financial system.

China does not need to replace London.

It only needs to become gradually less dependent on it.

Behind the Story Are Hundreds of Tonnes of Real Metal

Infrastructure alone does not guarantee anything.

You can build the largest vault in the world, but if nobody uses it, its significance will remain limited.

China is different.

According to World Gold Council data, China’s net gold imports reached 152 tonnes in June, the highest level since March 2024.

During the first half of 2026, the country imported approximately 764 tonnes, an increase of 138% from a year earlier.

At the same time, the People’s Bank of China, or PBoC, continues to buy gold.

In July, according to reported figures, it added another 20 tonnes of gold. China’s official gold reserves therefore rose to approximately 2,366 tonnes, extending the reported monthly buying streak to 21 consecutive months.

The word official matters here.

The actual amount of gold held by the Chinese state or state-controlled institutions could be higher. Some estimates assume that not all holdings necessarily appear immediately in the central bank’s officially reported reserves.

We do not know the precise size of any such unreported holdings.

Still, I think it is reasonable to consider the possibility that 2,366 tonnes may not represent the complete picture of gold held across China’s state-controlled sector.

Chinese gold ETFs also held approximately 282 tonnes of gold in July.

When the numbers are placed side by side, the scale of the market becomes much easier to see:

I would not cherry-pick only the numbers that support a bullish view of gold.

Chinese gold jewelry demand fell by approximately 30% year over year during the first half of the year.

At current gold prices, that makes sense. Jewelry is partly a consumer purchase, and rising prices naturally discourage some buyers.

What I find much more important is the changing structure of demand.

Investment purchases through bars, coins, and ETFs accounted for approximately 66% of total Chinese gold demand during the first half of the year.

In other words, Chinese buyers are not purchasing gold only for jewelry.

An increasingly large share of demand is connected to gold’s role as an investment asset, a reserve, and a store of value.

If new vaults, physical settlement channels, and domestic financial products are being developed at the same time, the pieces begin to fit together.

Is Gold Price Discovery Shifting From London to China?

It would be an exaggeration to say that Shanghai is now taking over global gold price discovery.

London has enormous liquidity, infrastructure built over decades, and a vast network of banks, refiners, and vaults. COMEX remains crucial for futures trading and hedging, meaning protection against adverse price movements.

But something is changing.

One long-standing indicator of Chinese physical gold demand is the Shanghai premium.

Its meaning is straightforward.

If gold trades at a higher price in Shanghai than in London, it means Chinese buyers are willing to pay more for the metal.

That price difference creates an economic incentive to import gold into China.

When bullion can move freely between markets, arbitrage comes into play. Traders buy gold where it is cheaper and sell it where it is more expensive, gradually narrowing the price difference.

But arbitrage works best when there are as few barriers as possible between markets.

If regulatory restrictions increase, transportation costs rise, or accepted standards begin to diverge, bringing prices back into alignment can become more difficult.

And this is where China’s new infrastructure starts to matter.

If increasing amounts of gold are stored directly in Hong Kong and Shanghai, traded through local products, and settled through local infrastructure, the Shanghai premium will no longer be the only metric worth watching.

The liquidity of the Asian market will matter too.

Liquidity simply describes how easily an asset can be bought or sold in substantial quantities without a single transaction moving the price dramatically.

The deeper and more liquid the Chinese market becomes, the more influence its price formation could eventually have on the rest of the world.

Hong Kong is also developing its own HAU gold price indicator, which could serve as another reference point for the local market.

What I Will Be Watching Next

The physical gold market may gradually become more regional.

We may continue to see one global gold price on our screens. Beneath that price, however, differences could grow in where a specific bar is accepted, which vault it can enter, which exchange can use it, and how easily it can move between regions.

That is why I will be watching four things closely over the coming months:

• The outcome of the LBMA review of Shandong Gold. If the suspension is lifted, the current situation may remain relatively isolated. If it becomes long-term, the case will carry much greater significance.

• COMEX’s next steps. In particular, whether the restrictions remain limited to a single brand and whether any changes become visible in physical gold flows.

• Actual volumes moving between Hong Kong and the Shanghai Gold Exchange. Building infrastructure is one thing. Filling it with metal and liquidity is another.

• Chinese imports, central-bank purchases, and investment demand. The combination of real physical metal and expanding infrastructure may prove to be the most important factor.

I will also be watching the Shanghai premium and the further development and adoption of the HAU gold price indicator.

If more transactions begin using prices formed during Asian trading hours while the quantity of physical gold stored directly in the region continues to rise, it will become increasingly difficult to argue that China’s gold market is simply a passive price taker from the West.

That is why I think the developments surrounding Shandong Gold are more important than they may initially appear.

Gold remains a global asset. But the infrastructure that determines how physical gold moves around the world is becoming increasingly regional.

There is something almost cruel about silver.

You can have a long-term market deficit, limited ability to quickly increase mine supply, strong industrial demand, and growing investor interest. Everything can seem to point toward a major move.

And then, for months, almost nothing happens.

The price moves sideways. A few false breakouts appear, and every time things finally start to look interesting, silver pulls back again.

Then a few weeks come along in which silver makes the kind of move investors had been waiting years to see.

Silver taught me more about patience than I ever expected — and that may be the most valuable lesson I’ve learned from investing.

Patience.

Not the simple kind where you just “buy and forget about it.” Silver requires a much more uncomfortable kind of patience.

You can be right about the long-term direction of the market and still be completely wrong about the timing. Fundamentals can steadily improve while the price ignores them for months.

And I think 2026 has been one of the best examples of just how extreme this market can be.

2026 Reminded Me What Silver Can Really Do

Silver entered this year with enormous momentum.

It ended 2025 at record levels around $70 per ounce. But the move did not stop there. Another wave of buying arrived in January, and on January 29, silver climbed above $120 per ounce.

Then everything reversed.

Over the following months, silver gave back much of that move, and by August it was once again trading roughly in the $60–70 per ounce range.

In other words, within just a few months, investors watched silver climb above $120 and then fall by almost half.

At first glance, it would be easy to reach a simple conclusion: something went wrong.

But this is exactly where I think silver becomes so interesting.

The price changed dramatically. Some of the most important fundamentals behind the story did not change nearly as much.

Being Right Isn’t Enough

One of the biggest lessons I have learned from following precious metals is simple:

You can be right and still look wrong for a very long time.

Imagine an investor who, several years ago, was watching rising industrial silver consumption, limited growth in mine supply, and a recurring structural market deficit.

The reasoning could have been perfectly logical.

If the world consistently consumes more silver than mining and recycling can supply, the difference has to be covered by metal that was mined in the past.

That is exactly what has been happening.

According to the Silver Institute, 2026 is expected to mark the sixth consecutive annual deficit in the silver market.

But that did not mean the price simply went higher every year.

And this is where my own way of thinking about silver has gradually changed.

I used to give fundamentals much more weight when trying to anticipate short-term price movements. Today, I mainly use them to answer a different question:

Does it still make sense to hold this metal over the long term?

That is a completely different question from:

Where will the price be next month?

The two are often confused.

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A Deficit Is Not a Timer

Silver is a perfect example.

When people hear that the market is in deficit, it is easy to imagine that silver is “running out” and therefore the price must immediately rise.

It doesn’t work that way.

A deficit means that current supply is insufficient to cover current demand. For some time, that difference can be filled by drawing down existing above-ground inventories.

That metal can come from several places:

private holdings,

ETFs and other investment products,

exchange inventories,

commercial stockpiles,

metal returning to the market through recycling as higher prices encourage selling.

That is why a deficit can persist for several years without someone opening the COMEX vault one morning and discovering there isn’t a single ounce left.

For me, there is a much more important question.

At what price are the holders of those existing inventories willing to release their silver back into the market?

Silver does not have to physically “run out” for the market to begin behaving differently. It is enough for the amount of metal available at a particular price to become insufficient.

The price then has to persuade the next owner to sell.

That is simply how markets work. And it is also one reason why long periods of relative calm can end with an extremely rapid move.

The Biggest Moves Come After Patience Runs Out

When you watch silver every day, it is easy to lose perspective.

One day, +2%.

The next, −3%.

The Fed says something. The dollar strengthens. Bond yields fall. Futures open interest rises. COMEX inventories move between the registered and eligible categories.

Every day seems to have an explanation.

But after following this market for years, I increasingly think the important thing is learning to separate noise from an actual change in trend.

Silver can produce dozens of moves that look like the beginning of something much bigger.

Most of them aren’t.

But then a period arrives when several factors begin moving in the same direction at the same time. Investment demand strengthens, the physical market tightens, momentum attracts speculative capital, and the price begins accelerating.

At that point, the opposite problem appears.

The investor who spent years waiting suddenly feels that he has to do something.

And that is exactly when many bad decisions are made.

I have watched this happen repeatedly with silver.

When the price stagnates for long enough, interest gradually disappears.

The discussions become quieter. Investors start looking for something more exciting. The media barely talks about silver. Fundamental arguments that seemed convincing a few months earlier begin to feel tired.

And then the price finally moves.

Suddenly, the exact opposite happens.

Silver is everywhere. Price targets keep getting higher. Every short-term move is treated as enormously important, and people who had no interest in buying the metal at much lower prices only a few months earlier suddenly become afraid of missing out.

January 2026 was, in my view, a perfect reminder of this mechanism.

When silver moved above $120, it was very easy to believe that everything had finally changed.

The momentum was enormous.

After years of investors waiting for a truly major move, it had finally arrived.

But the speed of the rally itself should also have been a warning.

The faster a price rises, the more capital enters the market that has very little to do with silver’s structural story. These buyers are not necessarily buying because of a long-term deficit or constrained supply.

They are buying simply because the price is going up.

And that same capital can leave just as quickly.

The subsequent collapse therefore did not convince me that silver’s long-term story was over.

Instead, it reminded me that a good fundamental story can still become a bad investment if you are willing to pay any price for it at the height of euphoria.

I consider that lesson just as important as learning patience during periods of stagnation.

You need to know how to wait when nothing is happening.

But sometimes you also need to know how to do nothing when everything seems to be happening at once.

And that is why I no longer look at silver only through its price.

How much metal is coming from mines? How much is returning through recycling? How is industrial demand changing? What is happening with COMEX inventories and other major vaults? Is capital flowing into silver ETFs or leaving them? And what is happening in the physical markets in China and India?

None of these indicators can predict the price on its own.

But together, they give me a much better picture than a single day’s move in the futures market.

I stopped expecting fundamentals to tell me exactly when the price will rise.

Instead, I want them to tell me whether the reasons I hold silver for the long term are still there.

And so far, I believe the answer is yes.

The Manipulation Question

If you follow silver long enough, sooner or later you will come across the subject of price manipulation.

And I understand why.

You can watch relatively calm trading for hours through the Asian and European sessions, then the U.S. session opens and within a short period of time a sharp sell-off appears. Sometimes there is no obvious piece of news that seems large enough to explain the move.

When you see something like this happen repeatedly, it becomes frustrating.

I have watched these moves many times myself.

The U.S. session brings enormous liquidity, futures trading, macroeconomic data releases, movements in the dollar, bond yields, algorithmic trading, and shifts in the positions of large speculators. A sharp decline can have completely legitimate market reasons.

At the same time, I reject the opposite extreme — the claim that manipulation in precious metals markets is nothing more than a conspiracy theory.

It isn’t.

There are real cases that have ended up before regulators and courts.

The U.S. CFTC, for example, found that JPMorgan traders had engaged in spoofing in precious metals and U.S. Treasury markets for at least eight years. They placed orders they had no intention of executing in order to create a false impression of supply or demand and influence other market participants. JPMorgan ultimately agreed to pay more than $920 million.

That is not speculation. It is a documented case.

Two former JPMorgan traders were later convicted of fraud, attempted price manipulation, and spoofing as part of a long-running scheme in precious metals futures markets.

So when someone says manipulation in precious metals markets never happens, history simply does not support that claim. And those are only the cases that were officially investigated and punished. How many others may have gone unnoticed or never resulted in regulatory action is something we can only speculate about.

The Paper Market and the Physical Reality

This is another thing I have had to learn to accept about silver.

The price we see on our screens every day is not determined by solar-panel manufacturers, electronics companies, miners, and physical coin investors all getting together somewhere and deciding what an ounce should be worth.

Price discovery takes place primarily in an enormous financial market.

Futures contracts can change hands in seconds. You do not need to deliver a truckload of silver bars to an exchange in order to open a large position.

That is why a short-term move in the price can sometimes look completely different from what you are seeing in the physical market.

Futures also serve a legitimate purpose. Miners, refiners, industrial companies, and investors use them, among other things, to hedge price risk.

But I think it is a mistake to confuse the financial price of the metal at a particular moment with the complete picture of the physical market.

In the short term, capital can dominate.

In the long term, the metal has to exist.

And that difference is what interests me most about silver.

It has also changed the way I look at price declines.

When all you own is a number on a screen, a decline looks simple.

You had 100.

Now you have 80.

You lost 20.

Over time, I have started to think about physical metal a little differently.

If the price of silver falls sharply over several days, but the amount of metal I own has not changed, its physical properties have not changed, industrial demand has not suddenly disappeared, and global mine production has not increased by hundreds of millions of ounces overnight, then the price move alone does not automatically change my long-term view.

Of course, I am not indifferent to price.

It would be absurd to claim otherwise.

When silver falls 20% or 30%, no investor is happy about it.

The difference is what I do with that information.

Today, the first thing I ask myself is:

Has anything fundamental actually changed?

If it has, I need to reconsider my view.

If it hasn’t, then it may simply be another chapter in the volatility that has always been part of silver.

And what if someone bought right in the middle of the euphoria at a high price?

Even then, everything is not necessarily lost. If they still believe in the long-term silver thesis, they can gradually add to their position at significantly lower prices and reduce their average purchase price. Of course, that only makes sense if it fits their investment plan and does not expose them to excessive risk.

It is exactly for situations like these that we created the Portfolio Tracker at Silver Dominion. It allows you to calculate your average purchase price, track individual purchases, and see how additional buying would affect your overall cost basis.

The tool is completely free and requires no registration:

Silver Dominion Portfolio Tracker

What Silver Ultimately Taught Me

If I had to reduce all these years of following silver to one lesson, it would not be about learning how to predict its price.

It would be about learning to stop feeling the need to predict it every week.

Silver taught me that the market does not have to confirm my view when I want it to.

It taught me that strong fundamentals are no guarantee of good timing.

That a sharp decline does not automatically mean the long-term story has fallen apart.

And that a sharp rally does not automatically mean every higher price is reasonable.

Manipulation in precious metals markets has demonstrably occurred in the past. That is why I do not think sharp moves in U.S. futures markets should automatically be dismissed as something silver investors simply imagined. At the same time, I do not think every decline should be labeled as proof of manipulation.

I would rather follow the facts.

And if the fundamentals change, I will change my view with them.

But as long as they do not, I have no need to let every red candle on a five-minute chart determine my long-term outlook.

Maybe that is the most valuable thing silver has given me.

Not the ability to predict the next move.

The ability to wait for it.

Not long ago, London was one of the places where stress in the physical silver market was easiest to see. Metal was moving between regions, lease rates were rising sharply, and in October 2025 the combination of falling inventories and strong investment demand contributed to an extraordinary liquidity squeeze. This has led many to question: Silver Still in Deficit?

Now something appears to be happening in the opposite direction.

Silver is moving back into London vaults.

According to the latest LBMA data, London vaults held 28,082 tonnes of silver at the end of June 2026, representing a 1.7% monthly increase. At the end of March, the figure stood at 27,487 tonnes.

That means inventories increased by roughly 595 tonnes in three months, or around 19 million troy ounces.

Looked at alone, this could suggest that the physical market is becoming more comfortable. But I think the reason behind the increase matters much more than the number itself.

High prices encouraged some holders to sell, recycling responded, and more secondary silver returned to the market. At the same time, industry continues to consume hundreds of millions of ounces annually, while the global market is still expected to remain in deficit.

So the real question is not simply why there is more silver in London.

The ongoing analysis of these trends raises an important inquiry: Silver Still in Deficit?

It is where that silver is coming from — and whether it will stay there.

London Vaults Are Rebuilding

LBMA data showed 27,487 tonnes of silver held in London vaults at the end of March 2026. By the end of June, holdings had risen to 28,082 tonnes, equivalent to roughly 936,052 standard silver bars.

PeriodSilver Held in London VaultsApprox. OuncesEnd of March 202627,487 tonnes884 million ozEnd of June 202628,082 tonnes903 million ozChange+595 tonnes+19 million oz

PeriodSilver Held in London VaultsApprox. OuncesEnd of March 202627,487 tonnes884 million ozEnd of June 202628,082 tonnes903 million ozChange+595 tonnes+19 million oz

That is an increase of roughly 2.2% in three months. June alone produced a monthly increase of 1.7%.

For one of the world’s main centers of wholesale bullion trading, that is a meaningful movement.

But those 28,082 tonnes should not be interpreted as 28,082 tonnes of freely available silver waiting for buyers.

Some of the metal has specific owners. Some may back investment products. Other holders may simply have no interest in selling.

Silver stored in London and silver actually available to the market are not the same thing.

We saw why this distinction matters during 2025. Falling inventories, movements of metal into CME vaults and rising exchange-traded product holdings contributed to an extraordinary liquidity squeeze in October. Lease rates surged and parts of the supply chain came under pressure.

I therefore see today’s increase as a partial rebuilding of the physical buffer after an unusually tight period.

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Extreme Prices Pulled Old Silver Back Into the Market

When silver rises sharply, attention naturally goes to buyers.

How much are ETFs absorbing? Are investors buying coins and bars? What is industry doing?

But high prices also create new sellers.

The beginning of 2026 provided exactly that environment. According to the LBMA figures used in the original analysis, silver traded between $67.23 and $118.45 per ounce during the first quarter, a 76.19% range between the quarterly low and high.

Moves of that magnitude change behavior.

Someone who has owned silverware for decades suddenly sees a price at which selling becomes attractive. Jewelry returns to the market. Investors who accumulated bullion at much lower prices may decide to realize part of their gains.

Even material that previously wasn’t economical to process can become worth recycling.

And that response is visible in the data.

Silver recycling increased to 197.6 million ounces in 2025, its highest level in more than a decade. Jewelry and silverware selling contributed meaningfully to the increase.

Another rise is expected in 2026. The February outlook projected roughly 7% growth in recycling, taking recycled supply above 200 million ounces for the first time since 2012.

This is one part of the silver market that I think deserves more attention.

Higher prices don’t just reflect tighter supply.

Higher prices also create supply.

New mine production cannot react quickly. Above-ground silver can.

Silver Does Not Disappear — It Changes Hands

An ounce of silver can have several completely different lives.

Silver mined decades ago might become jewelry or silverware, later be sold as scrap, pass through a refinery and eventually return to the wholesale bullion market.

Or it may find its way back into industry.

This is why we need to be careful when interpreting London’s additional 595 tonnes.

LBMA data tell us how much silver is held in London vaults. They don’t tell us the complete history of every ounce entering them. We cannot say that those 595 tonnes came directly from retail investors selling coins, nor can we claim that a particular ounce sold by a household subsequently ended up in a solar panel or data center.

What we can see is the broader mechanism.

High prices have pulled more secondary silver back into circulation. Once scrap is collected, processed and refined to the required purity, it can re-enter the global supply chain.

This creates an interesting relationship:

people are selling silver because prices are high, while industry continues to consume it.

Not every recycled ounce goes into industry. Some becomes bullion again, enters investment products or returns to vaults.

But recycling expands the pool of metal available to all of them.

Industry Is Still Consuming Enormous Amounts of Silver

Industrial silver demand declined in 2025.

After several years of growth, industrial offtake fell by 3% to 657.4 million ounces. One major reason was weaker photovoltaic demand and the continuing effort by manufacturers to reduce the amount of silver used in individual solar cells.

Another modest decline is expected in 2026, with industrial demand projected at roughly 650 million ounces.

At first glance, that could look bearish.

I see it somewhat differently.

650 million ounces is still an enormous amount of physical metal.

The composition of demand is also changing. Solar manufacturers are reducing silver intensity and exploring substitution, while other areas — including data centers, AI-related infrastructure, automotive electronics and power-grid investment — are developing.

And industrial consumers behave differently from investors.

They don’t buy silver because they expect it to rise next month. They buy it because they need its physical properties.

An industrial user doesn’t care whether an ounce spent the previous decade sitting in someone’s silverware drawer. Once properly refined, it becomes usable silver again.

That is why recycling acts as such an important bridge between existing above-ground stocks and new demand.

Higher London Inventories Do Not Mean Physical Tightness Is Over

If we looked only at London, the conclusion could be simple:

March: 27,487 tonnes.
June: 28,082 tonnes.

Problem solved.

But the broader market tells a different story.

The Silver Institute still expects a sixth consecutive silver market deficit in 2026. Its February forecast projected a shortfall of around 67 million ounces and expected the market to remain dependent on releases of bullion from above-ground inventories.

That distinction matters.

The market doesn’t depend only on newly mined silver. It also needs metal that someone already owns — and that owner has to be willing to release it.

Higher prices are encouraging exactly that.

This is why recycling can rise, London inventories can rebuild and the global market can remain in deficit simultaneously.

If London inventories were rising during a period of huge global surplus, I would interpret the situation differently.

Instead, they are rebuilding while the wider market still requires existing bullion to bridge the gap between supply and demand.

For me, that makes the current increase a rebuilding of the physical buffer rather than evidence of a structural silver surplus.

What Happens When Investors Stop Selling?

This is the question I find most interesting now.

High prices have successfully pulled additional metal into the market. Recycling is rising and owners are selling jewelry, silverware and other forms of old silver.

But that source of supply is not infinitely elastic.

The first major price increase can attract metal from people who were already relatively willing to sell. After that, the question becomes:

How much more silver can the market attract without another substantial increase in price?

At the same time, stronger physical investment demand is expected to return.

The February outlook projected that physical investment could increase by roughly 20% in 2026 to around 227 million ounces.

And this creates a fascinating tension.

A high price convinces one owner to sell.

The same price trend convinces someone else to buy.

Physical investment demand has ranged from 157.2 million ounces in 2017 to a record 337.6 million ounces in 2022 — a difference of roughly 180 million ounces.

Put that number next to the projected 67-million-ounce deficit for 2026.

The potential swing between weak and exceptionally strong physical investment demand is considerably larger than the expected annual market deficit.

That’s one of the comparisons I find most revealing.

If investors begin absorbing physical metal aggressively again while industry continues to require roughly 650 million ounces annually, today’s rebuilding of inventories could slow surprisingly quickly.

London May Tell Us More Than the Silver Price

I don’t see rising London inventories as automatically bearish for silver.

If anything, they demonstrate that high prices are capable of mobilizing physical metal.

Older silver is returning through recycling. Some holders are realizing profits. Metal is moving back into the commercial supply chain, while one of the world’s most important bullion centers rebuilds part of its physical buffer.

That’s a normal market response.

The question is how long it lasts.

The broader silver market is still expected to consume more metal than current supply can provide in 2026. The remaining gap has to come from silver that already exists above ground.

Over the coming months, I’ll be watching four things in particular:

• whether London inventories continue rising or turn lower again;

• whether high prices keep recycling above 200 million ounces;

• how strongly physical investment demand actually returns;

• whether London lease rates or other signs of physical tightness begin rising again.

If London inventories keep rebuilding and recycling remains strong, the physical market will have a larger cushion.

But if those inflows slow just as investors start absorbing more metal, the picture could change quickly.

And this is what I think matters most.

The silver market is not simply about how many ounces exist above ground. What matters is where those ounces are, who owns them, and at what price those owners are willing to release them.

Right now, high prices are persuading enough holders to bring additional silver back into circulation.

The next question is how long that continues.

According to the survey, 45% of the central banks surveyed expect to increase their own gold reserves over the next 12 months. That is the highest figure ever recorded in the survey. In 2025, 43% of respondents gave the same answer, while in 2024 the figure was only 29%.

The move from 43% to 45% may not look especially dramatic at first glance. The picture becomes much more interesting when we look several years further back. In 2019, only around 11% of surveyed central banks expected to increase their own gold reserves. Today, we are talking about almost half.

For me, this longer-term shift is one of the most interesting changes taking place in the gold market. Central Banks Want More Gold even after a substantial rise in prices, suggesting that this is about much more than short-term market movements or reactions to geopolitical events. The attitude of institutions managing some of the largest foreign exchange reserves in the world is changing.

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From 11% to a Record 45%

Looking at the individual years makes the scale of the change much clearer. In 2019, approximately 11% of respondents expected to increase their own reserves. That share rose to 20% in 2020 and to 25% in 2022. In 2023, it slipped slightly to 24%, before climbing again to 29% in 2024.

Then came a much sharper jump.

In 2025, 43% of surveyed central banks expected to increase their own gold reserves, and in 2026 the figure reached a record 45%.

This development is interesting for more than just the number itself. It shows how much central bank thinking about gold has changed in only a few years. Not long ago, the group of institutions planning additional purchases was relatively small. Today, their share is approaching half of all respondents.

And this is happening at a time when gold is certainly not cheap. Central banks are not buying simply because the market is offering an unusually attractive price. Their interest has remained strong even after a substantial rise in the value of gold.

That is an important detail.

A private investor often focuses heavily on whether they are buying at a good price today, next week, or a few months from now. A central bank has a completely different time horizon. It manages national reserves and thinks in terms of many years, sometimes decades. Short-term price movements therefore do not necessarily carry the same weight in its decision-making as they do for an individual investor.

In this environment, gold serves primarily a strategic role. It is not another country’s liability, it is not a claim on a foreign bank, and its existence does not depend on another counterparty being able to meet its obligations. If physical gold is genuinely under the control of a central bank or the state itself, it represents a reserve asset with very specific characteristics.

That may be one of the reasons why demand for it remains strong even at significantly higher prices.

It Is Not Just About Expectations — Central Banks Have Already Been Buying for Years

Surveys are one thing. Actual purchases matter even more.

And this is where the story becomes much more significant. Over the past four years, central banks have purchased an average of approximately 1,000 tonnes of gold per year. By comparison, the average during the previous decade was roughly 500 tonnes annually.

In other words, the pace of purchases has roughly doubled in recent years.

That is already a volume that cannot be ignored when looking at the global gold market. Central banks have become one of the major sources of long-term demand, and their activity is helping create a very different market environment from some earlier periods.

What stands out most is that the buying has continued despite rising prices. Under normal circumstances, we might expect a sharp increase in the price of an asset to discourage at least some buyers. So far, central banks have shown a strong willingness to continue.

That makes sense if short-term returns are not their main objective.

A central bank does not buy gold because it expects to sell it a few months later for 10% more. From a reserve-management perspective, the priorities are diversification, security, liquidity, and preserving value over a long time horizon.

In that case, the question can gradually shift from “Is gold too expensive?” to “How much of our reserves do we want to hold in an asset that does not carry another counterparty’s credit risk?”

That is a completely different way of thinking.

The large purchases of recent years also create a kind of underlying layer of demand that was not present with the same intensity in earlier periods. Of course, we should not assume that central banks will automatically buy exactly 1,000 tonnes every year. Annual volumes can vary significantly. Some institutions may slow their purchases, while others may accelerate them.

What matters is the direction we have been seeing for several years. And the latest survey shows that the appetite for adding more gold has not disappeared.

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89% of Central Banks Expect Global Gold Reserves to Keep Rising

One more number from the survey deserves attention. A full 89% of respondents expect total global central bank gold reserves to increase over the next 12 months.

There are two different questions here, and the distinction matters.

One asks whether a central bank expects its own reserves to increase. A record 45% answered yes. The other asks about expectations for total central bank gold reserves worldwide. That figure rises to 89%.

The difference is important. Nearly nine out of ten respondents therefore expect the central banking sector as a whole to continue adding gold over the coming year.

That provides a strong indication of how central banks themselves view the broader trend.

It does not mean that 89% of central banks will personally be buyers. Some may leave their reserves unchanged, while others could even become net sellers during a particular period. Still, the overwhelming majority expect the global trend toward higher central bank gold reserves to continue.

For the market, it also matters that we are not talking about a small group of private investors reacting to the latest headlines. Central banks manage enormous pools of assets, and changes in their long-term allocation can influence demand for many years.

Think about the difference between a one-off investor purchase and the systematic construction of reserves. If a country decides that it wants to increase gold’s share within its reserves, it does not have to buy everything within a few weeks. The process can be spread over a much longer period.

That is why I pay more attention to the broader trend in central bank behavior than to any single month or quarter.

And right now, that trend remains very strong.

Gold Is Taking on Greater Strategic Weight in Reserves

The basic reasons central banks hold gold have not changed dramatically. They include reserve diversification, protection during periods of crisis, and the ability to preserve value over long time horizons.

In recent years, however, those characteristics have received far more attention.

The global economy has gone through a pandemic, high inflation, a sharp rise in interest rates, and an increasingly tense geopolitical environment. At the same time, public debt levels in major economies have continued to rise, while relationships between some of the world’s largest powers have become considerably more complicated than they were ten or fifteen years ago.

In that kind of environment, gold has one characteristic that many other reserve assets do not: it is not someone else’s liability.

When a central bank holds a foreign government bond, it owns a financial claim. When it holds a currency or a bank deposit, there is again a counterparty and a connection to the financial system. Physical gold works differently.

The physical nature of gold is crucial in this context. Central banks are not buying a story about the gold price displayed on a screen. They are building actual reserves of metal. For a country that wants to hold part of its reserves outside the traditional system of claims and liabilities, that is a characteristic that is difficult to replace.

This also explains why I would not view central bank gold purchases in the same way as ordinary investment speculation.

If someone buys a gold futures contract in an attempt to profit from a price move over the next few weeks, that is a completely different transaction from a central bank adding physical metal to long-term national reserves.

Price obviously matters in both cases, but the purpose of holding the asset is fundamentally different.

And the fact that central banks continue building physical gold reserves even after a substantial rise in price strikes me as far more relevant to the long-term gold market than most short-term price forecasts.

Gold Purchases Are Changing the Structure of Global Reserves

There is another important aspect behind the current trend. It is not only about how many tonnes of gold central banks buy each year. The way countries structure their reserves, and how they think about allocating them, is also changing.

For a long time, it was completely normal to hold a large share of reserves in major global currencies and, above all, in government bonds issued by the world’s largest economies. That system is not disappearing. The dollar, the euro, and other reserve currencies will continue to play a major role. But current developments show that many countries do not want to rely entirely on financial assets tied to a single currency or a single financial system.

This is where gold gains more room.

There does not need to be any dramatic move away from the dollar for this process to have a major impact on the gold market. Global foreign exchange reserves are so large that even a relatively small change in their structure can represent a significant amount of money.

If a central bank decides to gradually increase gold’s share of its reserves, that does not necessarily mean one enormous purchase. It can keep buying the metal over several years, take advantage of weaker periods in the market, and build the desired position step by step.

To me, that kind of process matters more than one exceptionally strong year.

A one-off purchase can disappear just as quickly as it appeared. A long-term change in reserve policy can create demand for years.

It is also interesting to look at where this demand is coming from. In some emerging economies, part of the motivation may be to build reserves that are less concentrated in foreign currencies. Some countries still have a relatively low share of gold in their total reserves compared with developed economies, which means there may still be considerable room for further purchases.

This does not have to be some coordinated escape from traditional reserve currencies, as it is sometimes portrayed. A gradual diversification process seems far more realistic. A country does not need to sell all of its dollar reserves in order to want to own more gold at the same time.

It only needs to decide that gold should carry more weight within its reserves.

And if a larger number of central banks begin thinking in the same direction, those individual decisions gradually add up.

This process can be slow and almost invisible at first. That is exactly why its long-term importance can easily be overlooked.

In the gold market, enormous attention is often given to what the Federal Reserve will do at its next meeting, how interest rates will change, or where the dollar will move over the next few weeks. These factors can certainly move the gold price sharply in the short term.

A change in the structure of global reserves is a completely different story. It happens slowly, but its impact can last much longer.

If central banks continue gradually increasing gold’s share of their reserves over the coming years, the market gains a buyer whose decisions are not driven solely by the latest sentiment in financial markets.

And this part of the current trend could remain important for gold long after today’s price movements have been forgotten.

Another interesting question is the availability of the metal itself.

At first glance, it may seem strange to talk about limited gold supply. There is an enormous amount of gold in the world that has been mined throughout history, and a large share of it still exists in one form or another. But not all of that gold is actually for sale.

That is a crucial distinction.

A gold bar that has been sitting in a central bank vault for decades still exists statistically, but it may not be available to the market. The same is true for investment gold held for the long term or for jewelry. These holdings do not automatically represent supply that a new buyer can immediately access.

So price does not only determine how much gold exists in the world. It also has to convince the current owner to sell.

If more large institutions move into the category of long-term holders, this question could become even more important over time.

New mine production adds more gold to the market every year, but its ability to respond is limited. Building a new mine is a capital-intensive process, and many years can pass between discovering a quality deposit and reaching regular commercial production.

Mining companies need more than just a high gold price. They also need suitable geology, financing, infrastructure, permits, and economically viable operating costs.

Supply therefore cannot react to changes in demand as quickly as it can in industries where production can be expanded significantly within a few months.

If a new long-term buyer enters the market, the metal has to come from somewhere else — through new mine production, recycling, or a higher price that persuades some existing holders to sell.

And this is where central bank purchases can gradually affect the broader market far more than the headline number of tonnes purchased might initially suggest.

What Could the Current Trend Mean for the Years Ahead?

The biggest question is not whether central bank gold purchases will break records every year. What matters more is whether this shift becomes a lasting part of the gold market.

If it does, gold could benefit from a more stable source of institutional demand. That does not mean prices will rise continuously. Interest rates, the dollar, investment flows, recycling, jewelry demand, and market sentiment will continue to create volatility.

From a long-term perspective, however, what matters is who is buying physical gold and how long they intend to hold it.

Central banks are different from most market participants. Once gold enters national reserves, it is often held for many years. This can gradually reduce the amount of metal circulating in the market.

Every year, new supply comes from mining and recycling. Jewelry manufacturers, investors, funds, technology companies, and central banks all compete for that metal. If central banks continue absorbing a significant share of supply, the market eventually has to adjust through higher supply, weaker demand elsewhere, or price.

Central bank purchases therefore do not need to keep setting records to remain important. They only need to remain significant net buyers.

Another factor worth watching is how many countries participate. If purchases were concentrated among only a few central banks, a change in policy at one or two institutions could quickly weaken the trend. A broader increase in interest across many countries would make the shift much more significant.

Geopolitics may strengthen this process as well.

Sanctions, frozen foreign reserves, and growing tensions between major powers have shown that reserve management is not only about returns. Control over assets also matters. Physical gold stored domestically has a clear advantage here: the country controls the metal directly without depending on a foreign counterparty.

None of this requires the collapse of the current monetary system or a sudden move away from the dollar. Even a gradual increase in gold’s share of global reserves could create substantial additional demand because the size of worldwide financial reserves is enormous.

For holders of physical gold, this is particularly interesting over the long term.

Gold prices will still experience corrections, sometimes significant ones. But national reserve strategies change much more slowly than investor sentiment. Once central banks begin changing the structure of their reserves, that process can continue for years.

That is why I would watch more than just the number of tonnes purchased each year. The number of central banks joining the trend, the share of gold within their reserves, and whether demand remains strong during future price corrections may tell us much more.

The current numbers already provide a strong long-term backdrop for physical gold. Not because central banks can predict the next price move, but because more of them appear to want gold to play a larger role in their reserves.

If that continues, this may prove to be a structural trend lasting many years rather than just another short-term chapter in the gold market.

The correction came just as quickly. The price fell by almost half and now trades around $63 per ounce. Ever since then, one question keeps coming up:

Was $121 really Silver’s Final Peak, or could silver eventually move even higher?

I believe the second scenario is much more likely.

Not because I expect silver to skyrocket over the next few months, but because when I look at what is happening in mining, industrial demand, and investment demand, I feel that the long-term fundamentals are more favorable today than they were during most previous bull markets.

That is why I do not believe this year’s high represents Silver’s Final Peak of the current bull market.

Quite the opposite.

To me, it could be the beginning of a much longer story.

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This Year’s Correction May Have Actually Helped the Market

It may sound surprising, but the more I have thought about this year’s price action, the more I have come to believe that the sharp correction was not necessarily bad news for silver.

Rapid rallies almost always attract short-term speculators looking to make quick profits. When the trend reverses, those same investors often sell just as aggressively as they bought.

That is exactly what happened this year.

Many investors took advantage of the record prices to lock in profits. As a result, more physical silver appeared on the secondary market than in previous months. Some of that metal found new long-term owners, while some was refined and returned to the supply chain. This temporarily eased pressure on the availability of physical silver.

Meanwhile, many short-term speculators exited the market, while long-term investors largely stayed.

In my view, this helped remove some of the emotional excess and speculative enthusiasm that had built up during the rally. Markets are generally healthier when they are driven by strong fundamentals rather than fear of missing out.

A large portion of investors who wanted to sell have likely already taken profits. If demand for physical silver strengthens again and long-term investors begin accumulating rather than selling, pressure on available supply could return surprisingly quickly.

That is why I do not see this year’s correction as just another price decline.

It may have laid the foundation for a much healthier and more sustainable advance, provided that the long-term fundamentals continue moving in the same direction.

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This Time, Something Completely Different Could Drive the Market

I think many investors still look at silver the same way they did ten or fifteen years ago.

Back then, most of the attention was focused on the U.S. dollar, interest rates, and the futures market.

Those factors will remain important.

But the world has changed.

Silver demand is no longer driven primarily by investors. An increasingly large share comes from industry. Solar energy, data centers, artificial intelligence, semiconductors, medical technologies, and advanced electronics all require significant amounts of silver.

Although industrial silver demand is expected to decline slightly this year, that should not be interpreted as a weakening of silver’s importance. The main reason is the continued reduction in the amount of silver used in each solar panel, along with some substitution by alternative materials.

Even so, industrial demand is still expected to remain around 650 million ounces per year, making it one of the strongest periods on record. At the same time, new areas of consumption continue to expand, including AI infrastructure, power grids, semiconductors, and data centers.

This is where I see the biggest difference compared with previous cycles.

If investment demand rises again over the coming years while industrial consumption remains historically strong, two powerful groups of buyers will be competing for the same ounces of silver.

That is not something we have seen on this scale before.

And that is why I believe the next major silver rally could look very different from this year’s move.

What Has Changed Since 2011?

Whenever investors discuss the possibility of silver moving above $121 again, many immediately compare today’s market with the previous major bull market.

I think that comparison misses one important point.

Today’s silver market is fundamentally different.

In 2011, investment demand was one of the primary drivers. The global financial crisis was still fresh in investors’ minds, central banks were aggressively easing monetary policy, and investors were searching for protection against inflation and financial uncertainty.

Silver benefited primarily from speculative investment flows.

Today, the picture is much broader.

Investment demand remains important, but it is now accompanied by much stronger industrial demand.

Another major difference is on the supply side.

The silver market has been in a structural deficit for several consecutive years. According to estimates from the Silver Institute, 2026 is expected to become the sixth consecutive year in which total demand exceeds total supply.

That means part of global consumption is being satisfied by drawing down above-ground inventories rather than relying solely on newly mined silver.

Those inventories, however, are not unlimited.

This combination is, in my opinion, the biggest difference compared with previous cycles.

If investment demand accelerates again, it will not be entering a market driven only by speculation.

Instead, it will be joining already-strong industrial demand in a market where supply cannot respond quickly enough.

That is why I believe many investors underestimate how much the structure of today’s silver market has changed.

They continue comparing today’s environment with 2011, even though demand is now being driven by a very different mix of industries.

The Futures Market May Not Be the Main Driver This Time

A few years ago, I probably would have said that the next major move in silver would be determined primarily by COMEX.

Today, I am no longer convinced.

The futures market will continue to play an important role in price discovery, but I do not think it will be the only engine behind the next major advance.

When I compared this year’s CFTC data, one thing surprised me.

Open Interest remains well below the levels seen during January’s peak. Likewise, net long positions held by hedge funds and bank short positions are nowhere near record highs.

After such an exceptionally volatile year, I would have expected futures activity to be much more aggressive.

To me, this is actually encouraging for long-term investors.

If fresh capital begins flowing back into the futures market over the coming months, it will not be entering an already overheated market. Current Open Interest suggests there is still room for trading activity to expand.

Of course, rising Open Interest alone does not automatically mean higher prices.

What matters is who is opening new positions and why.

However, if stronger demand for physical silver develops at the same time that new capital returns to the futures market, the two forces could reinforce each other.

That is the combination I will be watching most closely over the coming months.

What Could Stop the Rally?

Although I remain optimistic about silver’s long-term outlook, I do not believe the path toward new highs will be easy.

If history has taught me anything, it is that silver can surprise investors more than almost any other precious metal. Periods of rapid gains are often followed by very deep corrections, and market sentiment can completely reverse within just a few weeks.

That is why it is not enough to watch supply and demand alone.

The U.S. dollar, real interest rates, and the overall health of the global economy will continue to play an important role. If, for example, central banks keep interest rates high for longer than the market currently expects, or if a deeper global recession develops, investors could become more cautious and some capital could temporarily move away from precious metals.

We also should not forget about investors themselves.

After this year’s rally, many people saw just how quickly silver can rise, but also how quickly it can fall afterward. It is entirely possible that if the price approaches its previous high again, some investors will once again decide to take profits. That could temporarily slow the rally or trigger another significant correction.

But that would not be unusual.

In fact, I believe that if silver is eventually going to develop a sustainable long-term uptrend, corrections like these will simply be part of the process.

The biggest question is not whether another correction will come.

The more important question is whether demand will remain strong enough afterward to push the price higher again.

And on that point, I remain relatively optimistic.

Why I Remain Optimistic About Silver

When I put all of these factors together, I keep coming back to the same conclusion.

I do not believe this year’s high of around $121 per ounce represents the final peak of this cycle.

Financial markets never offer certainty, and nobody can reliably predict where silver will trade one year or five years from now.

Still, I believe the long-term fundamentals look very compelling today.

According to estimates from the Silver Institute, the market is also heading toward its sixth consecutive year of structural deficit, with total demand exceeding total supply.

This year’s sharp correction may have actually strengthened the market. Many investors used the high prices to take profits, more physical silver returned to the secondary market, and the futures market was partially cleared of short-term speculation.

If investment demand begins strengthening again, silver could enter its next growth phase from a much healthier starting point than it had at the beginning of this year.

The question, is no longer whether this price level is achievable over the long term. The more interesting question is when the conditions will emerge for silver to move above it on a more sustainable basis. If the current trends in industrial demand, supply, and investment interest continue, $121 may not be the final destination, but simply another important milestone on a much longer road higher.

Every day, I follow the markets. I watch the prices of gold, silver, stocks, bonds, and currencies. I track economic data, central bank decisions, the movements of major investors, and changes across the global economy. Yet over the past few years, I’ve come to one important conclusion.

Today, price alone tells me far less than it used to.

That may sound surprising. Most people focus almost entirely on the chart. When prices are rising, interest begins to grow. But when prices decline for several weeks or months, that interest quickly fades. To me, that’s one of the biggest reasons why so many investors never achieve truly strong long-term results.

I believe Gold and Silver’s Best Years won’t be determined by today’s price action, but by the long-term fundamentals shaping the future.

The longer I’ve followed these markets, the more interested I’ve become in what lies beneath the price movements. Not just how much an ounce of gold or silver costs today, but why the market is moving in a particular direction. What central banks are doing. How government debt continues to evolve. How the money supply is changing. What industrial demand for silver looks like. How the geopolitical landscape is shifting.

That’s where I believe real investment opportunities are created.

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Markets Change Every Day. Fundamentals Change Much More Slowly.

One thing has fascinated me about financial markets for a long time.

Prices can move several percent in a single day. Sometimes all it takes is one central bank statement, one economic report, or a large sale by a major fund, and the market reacts immediately.

Fundamentals don’t work that way.

They change over months or even years.

When governments continue piling up debt, that debt doesn’t disappear within a week. When central banks expand the money supply for years, that process can’t simply be reversed in a few days. The same is true for industrial demand for silver or the development of new mines. Those changes happen gradually.

That’s why I always try to separate short-term price movements from the long-term story.

I often feel that many investors spend too much time following headlines. Every day they’re asking whether gold or silver will rise or fall next week.

But to me, there’s a much more important question.

Will today’s fundamentals be stronger five or ten years from now?

When I look at them, my answer is yes.

That doesn’t mean prices will rise every single month. Markets have never worked that way.

Every bull market goes through periods of optimism and disappointment. Sharp rallies are followed by equally sharp corrections. Sometimes the market moves sideways for months and appears to be going nowhere.

That’s exactly when most people lose patience.

To me, that’s simply a normal part of every long-term cycle.

Just look at history. Not a single major rally in gold or silver has ever moved in a straight line. There were always periods when investors doubted the story, sold their positions, and declared that the bull market was over.

A few years later, most of those doubts had disappeared.

Not because sentiment suddenly changed.

But because the long-term fundamentals eventually played out.

Why I’m More Interested in the World Than the Chart

People often ask me whether I think gold or silver will rise next week.

Honestly?

I don’t know.

And I don’t think anyone else does either.

Short-term market movements are influenced by countless factors—large fund positioning, algorithmic trading, macroeconomic data, interest rate changes, and investor sentiment.

Any of these can push prices significantly higher or lower within just a few days.

That’s why I prefer to spend my time focusing on what I believe matters far more.

I watch what central banks are doing.

I want to understand why they’re buying gold at record levels.

I follow the growth of government debt.

I pay close attention to budget deficits.

I track industrial demand for silver, especially in solar energy, electronics, data centers, and artificial intelligence.

I also focus on supply. How long it takes to bring a new mine into production. How mining costs are evolving. How much inventory exists. And how much physical metal is actually reaching the market.

When I put all of these pieces together, I get a much clearer picture than I ever could by looking at a price chart alone.

That’s why short-term price declines don’t concern me very much.

If the fundamentals haven’t changed, then neither has the long-term investment thesis.

And that’s exactly why I’ll continue sharing analysis, data, and market insights regardless of the current mood in the market.

Not because I’m trying to convince anyone.

But because I believe high-quality information is far more valuable than short-term emotions.

When Nobody Cares About Precious Metals, I Pay Even Closer Attention

One thing has repeated itself over and over again in recent years.

When prices are rising rapidly, almost everyone suddenly becomes interested in gold and silver. Headlines are filled with stories about new all-time highs, optimistic posts flood social media, and people begin to feel like they’re missing out.

Ironically, that’s when I become more cautious.

On the other hand, when prices fall for several months or simply move sideways, public interest almost disappears. Search volumes decline, discussions fade away, and many people start claiming that precious metals no longer matter.

To me, that’s exactly when it’s worth paying closer attention.

I’m not saying that every correction automatically creates a great buying opportunity. Markets are never that simple. But experience has shown me that some of the most interesting opportunities often appear when sentiment is at its worst.

People tend to confuse price with value.

When something has been rising for months, they automatically assume it’s a good investment.

When prices fall, they begin to doubt it—even if the underlying story hasn’t changed at all.

That’s why I always try to separate emotions from facts.

If I see central banks continuing to buy gold, governments continuing to accumulate record levels of debt, silver supply remaining constrained, and industrial demand continuing to grow, then a short-term price decline doesn’t convince me that the long-term outlook has changed.

Instead, I ask myself a different question.

Is the market selling primarily because of emotion?

I believe that happens far more often than most people realize.

Financial markets aren’t just numbers and charts. Above all, they’re millions of human decisions. And human nature rarely changes.

People are afraid to buy when prices are falling.

Yet they become eager to buy after most of the rally has already happened.

That’s exactly why I try not to base my decisions on the market’s current mood.

If I see that the fundamentals remain intact—or are actually improving—I see no reason to change my long-term view simply because the chart hasn’t looked good for a few weeks.

Today’s Fundamentals Are Stronger Than They’ve Been in Decades

When I look at today’s environment, it’s difficult to find another period when so many long-term factors have been working in favor of precious metals at the same time.

The first is debt.

This isn’t just about the United States. Record levels of government debt now exist across dozens of countries around the world. Every year, trillions of dollars in new debt are added, while interest payments alone are becoming a massive burden on national budgets.

I don’t believe this problem will be solved within just a few years.

On the contrary, I think it will remain with us for a very long time.

Another major factor is central banks.

Only a few years ago, many people viewed their gold purchases as little more than an interesting trend.

Today, that is no longer the case.

Central banks are buying gold at a pace we haven’t seen in decades—and I don’t believe that’s happening by accident.

They have access to enormous amounts of information and think about the long-term stability of their reserves. If they’re increasing their gold holdings, it’s worth asking why.

I also see a major shift taking place in silver.

In the past, silver was viewed primarily as an investment metal.

Today, its role is far broader.

Silver is an essential component in solar panels, electronics, medical technologies, electric vehicles, semiconductors, data centers, and the infrastructure supporting artificial intelligence.

Demand is no longer driven only by investors.

Industry is playing an increasingly important role.

To me, that’s what makes this cycle even more compelling than previous ones.

At the same time, increasing supply isn’t easy.

A new mine can’t be developed in a single year.

From the discovery of a deposit to permitting and commercial production, the process often takes ten years or more. During that time, energy costs, labor expenses, and financing costs continue to rise.

That means if demand keeps growing, supply may struggle to respond quickly enough.

When I put all these factors together, I come to one conclusion.

I don’t believe today’s prices will be considered high a few years from now.

Quite the opposite.

I think we’ll eventually look back at this period as a time when the market was still dominated by pessimistic expectations.

Of course, nobody knows exactly when that will happen.

It could be in a few months.

It could just as easily take several years.

I can’t predict the timing.

But to me, the long-term direction continues to make more and more sense.

My Goal Isn’t to Create Hype. It’s to Help People Better Understand the Market.

When I first began publishing regular market analysis, I realized something important.

The internet is full of content that’s designed primarily to capture attention.

You’ll constantly see headlines promising explosive gains, the collapse of the financial system, or guaranteed profits within a matter of months.

That kind of content may work in the short term.

It attracts clicks.

It creates emotion.

People share it and debate it.

But I don’t think investors gain much from it.

A few days later, another sensational headline appears.

Then another.

And another.

People end up jumping from one dramatic story to the next until they completely lose sight of the bigger picture.

That’s exactly why I’ve chosen a different approach.

Whenever I prepare an analysis or write an article, the first question I ask myself is whether it will genuinely help the reader.

Will it help them understand something they couldn’t easily see before?

I’d much rather spend hours studying data than writing sensational headlines.

I believe that’s what builds trust over the long run.

That doesn’t mean I’ll never be wrong.

Markets are far too complex for anyone to be right all the time.

But I always try to be transparent about how I reach my conclusions.

If I make a claim, I want it to be supported by data, logic, and a broader economic context.

To me, that’s far more valuable than constantly trying to predict what prices will do next week.

Short-term forecasts become outdated very quickly.

Understanding why central banks are buying gold, why government debt continues to grow, or why industrial demand for silver is increasing can benefit investors for many years to come.

That’s why I’ll continue sharing not only the numbers themselves, but more importantly, what those numbers actually mean.

I want to highlight the broader trends that deserve attention.

To explain why certain developments matter—and why others may not be nearly as important as they appear.

Because once you learn to view markets through a broader lens, you stop relying on daily headlines.

And I believe that’s one of the greatest advantages any long-term investor can have.

I Believe the Best Years for Gold and Silver Are Still Ahead

When someone asks me why I remain optimistic about precious metals after all these years, the answer is actually quite simple.

It’s not because I expect prices to rise without interruption.

Markets have never worked that way.

There will certainly be more corrections. There will be periods when prices move sideways for months. There will be times when most investors become convinced that the bull market is over.

I expect all of that.

But when I step back and look at the bigger picture, I see something very different.

I see a world that continues to accumulate more debt.

I see central banks continuing to buy gold.

I see growing geopolitical tensions.

I see a technological transformation that’s increasing silver’s importance as an industrial metal.

I see a monetary system facing ever-greater pressures.

And most importantly, I see that none of these trends are temporary.

These are long-term structural changes that are unfolding over many years.

That’s why I believe the long-term fundamentals for both gold and silver are stronger today than they have been in decades.

I’m not saying prices have to surge to new highs tomorrow.

I’m simply saying that, in my view, there are more reasons than ever to believe that both metals will be worth significantly more in the years ahead than they are today.

That’s the core idea behind every analysis I publish.

I’m not trying to predict every short-term move in the market.

What interests me far more is where the world is heading as a whole.

And the longer I watch these trends unfold, the more convinced I become that gold and silver will play a far more important role in the future than most people currently expect.

That’s why I’ll continue sharing analysis, data, and market insights regardless of today’s market sentiment.

When prices rise, I’ll explain what’s driving the move.

When prices fall, I’ll focus on whether the fundamentals have actually changed—or whether it’s simply investor emotions taking over.

I have no interest in chasing every short-term swing or creating unnecessary excitement.

What makes far more sense to me is building a place people return to for thoughtful analysis, reliable information, and a long-term perspective on the market.

Because I believe patience is one of the most underestimated qualities of successful investors.

In many cases, it matters far more than trying to perfectly time every purchase or sale.

Personally, I remain convinced that the journey for gold and silver is far from over.

If anything, I believe we’re only at the beginning of a much bigger story.

And that’s the story I want to continue following together with you.

Not because I’m trying to convince anyone.

But because this market continues to fascinate me, and I believe that over the long run, quality information is far more valuable than short-term emotions.

Let’s follow that journey together. I truly believe the most exciting chapters are still ahead.

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Many investors choose to own physical silver because they believe there is a fundamental difference between the paper silver market and the physical silver market.

At first glance, it may seem that the price of silver is determined primarily by physical supply and demand. If demand increases, prices should rise. If demand falls, prices should decline.

In reality, today’s silver market is considerably more complex.

The spot price of silver is influenced not only by trading in physical metal but also by enormous volumes of financial transactions whose value often exceeds the amount of silver that actually changes hands. Large institutional investors, hedge funds, banks, mining companies, and algorithmic trading systems all participate in these financial markets, making price movements far more complex than simple physical buying and selling.

Understanding the differences between the physical and paper markets is one of the most important concepts every long-term silver investor should understand.

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Where Is the Silver Price Really Determined?

Many new investors assume that silver prices are determined mainly by the buying and selling of physical bullion coins and bars.

In reality, a significant portion of global price discovery takes place on financial exchanges through paper contracts rather than through direct trading of physical metal.

The most important financial instruments include:

• Silver futures contracts

• Silver ETFs

• Options

• Swaps

• Unallocated silver accounts

• Other derivative products linked to the silver price

These products allow investors to gain exposure to silver without owning or taking delivery of the physical metal.

They provide high liquidity, low transaction costs, and the ability to trade within seconds.

At the same time, they also mean that short-term silver prices are often influenced more by speculative capital, leveraged trading, algorithmic strategies, currency movements, interest rates, and broader financial market conditions than by actual physical supply and demand.

As a result, the spot price does not always fully reflect conditions in the physical silver market, particularly during periods of unusually strong investment demand or tight physical supply.

The Paper Market Is Much Larger Than the Physical Market

Many analysts have pointed out that the volume of financial claims linked to silver is likely many times greater than the amount of physical silver immediately available for delivery.

This does not necessarily mean the system is broken.

Most market participants never intend to take delivery of physical silver. Instead, they use futures contracts and other financial products to speculate, hedge risk, or gain short-term price exposure.

As long as most investors close their positions financially rather than requesting physical delivery, the system generally functions smoothly.

However, this also creates an environment in which silver prices may be driven primarily by activity in the paper market rather than by actual conditions in the physical market.

For long-term investors, understanding this distinction is important because the price shown on a trading screen does not always represent the cost or availability of physical silver in the real world.

Why Physical Silver Supply Cannot Expand Quickly

Unlike financial contracts, physical silver cannot be created with a few keystrokes.

Every ounce of silver must first be discovered, mined, processed, refined, transported, and finally manufactured into investment coins or bullion bars.

This entire process depends on geology, mining capacity, energy availability, refining infrastructure, logistics, skilled labor, environmental regulations, and, above all, time.

Even a sharp increase in silver prices cannot dramatically increase global mine production within a few months.

The limited ability to expand supply quickly is one of the main reasons many investors consider physical silver to be a unique asset with characteristics that financial products cannot replicate.

What Happens When Physical Demand Increases?

Under normal market conditions, paper silver and physical silver prices generally move in the same direction.

However, the relationship is not always perfect.

If demand for physical silver rises sharply while available inventories remain limited, dealers may begin increasing premiums on investment coins and bullion bars.

In such situations, the spot price of silver may remain relatively stable while the actual price investors pay for immediate physical delivery rises significantly.

In other words, the price of financial contracts and the price of physical silver available for immediate delivery can temporarily diverge.

For this reason, many experienced investors monitor not only the spot price but also physical premiums, product availability, dealer inventories, and overall physical demand when evaluating the silver market.

Why Many Investors Prefer Physical Silver

For investors focused primarily on short-term trading, the difference between physical and paper silver may not seem particularly important.

For long-term investors, however, direct ownership is one of the main reasons for choosing physical silver.

Bullion coins and bars represent real wealth.

They are not simply numbers displayed on a trading platform or financial contracts linked to the silver price.

Physical silver cannot be created electronically.

It does not depend on a trading platform, a brokerage firm, a bank, or an investment fund.

It is a tangible asset that remains under your direct control and can be owned independently of the financial system.

This independence is one of the primary reasons why many investors view physical silver as a long-term store of wealth.

Physical Ownership Means True Ownership

There is a fundamental difference between owning a financial product and owning the metal itself.

When you purchase an ETF or another paper instrument, you own a financial product linked to the price of silver.

When you purchase a silver bullion coin or bar, you own the metal itself.

Physical silver can be stored securely, passed on to future generations, or transferred directly to another person.

Its existence does not depend on a stock exchange, a trading platform, or any financial intermediary.

For many investors, this level of independence represents the highest form of ownership and provides peace of mind that cannot easily be replicated by financial products.

Looking Beyond the Spot Price

The silver spot price is an important indicator, but it tells only part of the story.

Long-term investors should also pay attention to:

• Physical silver demand

• Bullion coin and bar premiums

• Physical metal availability

• Global silver mine production

• Industrial silver demand

• Recycling supply

• Central bank monetary policy

• Overall economic conditions

Considering all of these factors together provides a much more complete understanding of the silver market than relying on the spot price alone.

Why the Physical Market Matters

If silver production could instantly expand whenever demand increased, the distinction between the paper market and the physical market would be far less important.

In reality, silver production is constrained by geology, mining capacity, refining capabilities, logistics, permitting, investment cycles, and time. New mines cannot be brought into production within a few months, and physical supply cannot be expanded overnight.

For this reason, many investors pay close attention not only to the spot price but also to physical demand, bullion availability, dealer premiums, inventory levels, and long-term supply trends.

Together, these factors provide a much more complete picture of the silver market. While the paper market primarily reflects financial trading activity, the physical market reveals how much silver investors actually want to own. For long-term investors seeking to preserve wealth through tangible assets, understanding the physical market is just as important as following the spot price itself.

At first glance, the gold price didn’t do anything particularly unusual. The gold price briefly fell to around $4,000 per ounce before quickly recovering above $4,100. But what happened in the gold market over the past few days could prove to be far more important and may suggest that something is gradually changing

Under normal circumstances, the relationship is fairly straightforward. When U.S. Treasury yields rise, the gold price usually comes under pressure. That makes sense—gold does not generate interest, so higher bond yields generally make it a less attractive investment.

This time, however, the market behaved differently. U.S. Treasury yields were rising, oil prices were climbing, while gold remained relatively strong. That combination is far from typical. This suggests that investors are beginning to focus on factors beyond interest rates alone.

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Gold May No Longer Be Reacting Primarily to Interest Rates

Looking at the bigger picture, it seems that inflation concerns, geopolitical tensions, and uncertainty surrounding future monetary policy are becoming increasingly important for investors. While interest rates have traditionally been one of the primary drivers of the gold price, markets now appear to be responding to a much broader set of risks. In recent years, central banks have accumulated record amounts of gold, geopolitical tensions have intensified, and questions about long-term fiscal sustainability have become more prominent.

These developments may be encouraging investors to view gold less as an asset driven mainly by interest rate expectations and more as a long-term store of value during periods of economic and political uncertainty.

If this trend continues over the coming months, it could represent a far more significant shift. Rather than being a temporary anomaly, it may signal that the market is gradually placing greater emphasis on preserving purchasing power and managing long-term risks than on short-term movements in bond yields.

Uncertainty Around the Fed Continues to Support Gold

Another reason I believe gold has remained relatively resilient is the growing uncertainty surrounding the U.S. Federal Reserve. Markets still have little clarity about how the Fed’s new leadership will respond if inflation remains elevated while economic growth slows more noticeably. Even Fed officials themselves remain divided over the future path of interest rates.

And uncertainty is often what drives investors toward safe-haven assets. When no one can confidently predict the central bank's next move, part of the market naturally looks for assets viewed as long-term stores of value. That is why, I believe gold has held up surprisingly well despite still-elevated U.S. Treasury yields, even after retreating from its recent highs

We may be entering a period in which the market is relying less on traditional relationships and paying more attention to long-term uncertainty than to interest rates alone. If that proves to be the case, it could reshape how investors think about gold.

China Is Shifting Toward Physical Gold

One of the most interesting developments in recent days came from China. Several major Chinese banks are ending retail trading of paper precious metals linked to the Shanghai Gold Exchange. Customers have been given the option to close their positions, switch to products without financial leverage, or take delivery of physical metal.

At first glance, this may look like nothing more than a routine adjustment to banks’ product offerings. But viewed in a broader context, it seems to me to be another step toward placing greater emphasis on actual ownership of physical gold. China has spent years strengthening its position in the physical precious metals market, and this move fits naturally into that broader strategy.

Of course, it is still too early to say how much this will affect demand for physical gold. Nevertheless, I see it as another piece of the puzzle that points to the direction in which the market is gradually moving. At a time when the differences between paper and physical gold are being discussed more frequently, developments like this reinforce the growing importance of owning the metal itself.

India Is Preparing for Higher Gold Prices

Another notable development came from India, one of the world’s largest consumers of gold. The Indian government has increased duty drawback rates for exporters of gold and silver jewelry in order to offset the impact of higher precious metals prices on their businesses and help them remain competitive in global markets.

Governments typically do not adjust policies like these because of short-term price fluctuations. They usually make such changes when they believe new market conditions may persist for an extended period.

That is why some analysts see this move as an indirect indication that today’s gold prices may no longer be viewed as temporary. Instead, they may increasingly be regarded as a new pricing environment that businesses—and governments—will have to adapt to.

If that interpretation is correct, this is more than just an administrative adjustment. It could mean that one of the world’s largest economies—and one of the world’s largest consumers of gold—is beginning to adapt its policies to an environment where precious metals prices remain significantly higher than they were just a few years ago. Although gold has pulled back from its all-time highs, some analysts believe the Indian government is signaling that it expects higher gold prices over the longer term and is gradually adjusting its policies accordingly.

Conclusion

When I look at all of these developments together, I find it increasingly difficult to view them as isolated events. Gold is no longer reacting to the market in quite the same way it has for many years, China continues to place greater emphasis on owning physical gold, and India is already adapting its policies to an environment of higher precious metals prices.

For many years, investors primarily evaluated gold through the lens of interest rates. That relationship still matters, but I believe it is gradually becoming just one piece of a much larger picture. The risk of higher inflation, geopolitical uncertainty, record central bank purchases, and growing demand for physical gold are all playing an increasingly important role, and they should not be overlooked.

Markets never announce that a new cycle has begun. They simply start behaving differently. At first, a few subtle signals appear that most people ignore. Over time, more of these signals emerge, they begin to fit together, and eventually they develop into a new trend. Looking at what has been happening in the gold market recently, I have the impression that we may be witnessing the very early stages of such a shift.

Of course, there will still be corrections, periods of heightened volatility, and plenty of headlines attempting to explain every short-term move in the gold price. That has always been part of financial markets and always will be. Short-term fluctuations do not change the long-term story on their own. What matters far more is whether the underlying fundamentals of the market are changing. And we are seeing more and more evidence that this is exactly what may be happening.

If this trend continues, the biggest story over the coming years may not be whether gold is a few hundred dollars higher or lower next month. What could matter far more is that investors, central banks, and governments are beginning to view gold differently than they did in the past. If that shift continues to take hold, its impact is unlikely to be limited to gold alone. It could also shape the future of silver and the broader precious metals market for many years to come.

Then came the sharp correction, with prices falling back to around $50 per ounce, and market sentiment changed almost overnight.

What I find particularly interesting is how much physical silver may have returned to the market during this period. If tens of millions of ounces were indeed sold, this one-time wave of supply may have temporarily eased pressure on the physical silver market for several months.

I don’t believe it solved the long-term problem. It may simply have made it less visible for a while.

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Panic May Have Returned Tens of Millions of Ounces to the Market

This year’s selling wasn’t driven solely by investors taking profits. Panic likely played a major role as well.

As silver rapidly climbed toward $120 per ounce, it attracted a wave of new buyers eager not to miss the rally.

But within a matter of weeks, prices collapsed to around $50 per ounce, and sentiment reversed just as quickly. Fear replaced euphoria.

Many investors who had purchased near the peak began selling their physical silver to avoid even larger losses. Some long-term holders also decided to lock in profits while prices remained historically high.

That combination may have released an unusually large amount of physical metal back into the market.

At one point, reports also suggested that several refiners and bullion dealers were overwhelmed with buybacks and processing investment-grade silver. To me, that indicates the volume of physical metal being sold was far from insignificant.

No one knows the exact number, and we probably never will. However, based on this year’s price action, investor behavior, and overall market conditions, I believe it is reasonable to estimate that between 30 and 100 million ounces of physical silver may have been sold.

Some of that metal likely ended up in industrial supply chains, while the rest found new long-term owners.

While the West Was Selling, Asia Was Buying

Another aspect of this year’s market stood out to me.

While many investors in the United States and Europe were selling physical silver, demand across much of Asia remained exceptionally strong. A significant portion of the metal sold in Western markets likely made its way east.

I also believe the structure of the precious metals market is gradually changing.

Just a few years ago, most attention was focused on London and New York. Today, Hong Kong, Shanghai, and Singapore are becoming increasingly important.

This can be seen in Hong Kong’s efforts to strengthen its own infrastructure for trading and settling physical precious metals, with the ambition of becoming one of the world’s leading precious metals hubs.

At the same time, the Shanghai Gold Exchange, where trading is primarily backed by physical metal, continues to grow in importance and exert greater influence on the global market.

Singapore is also becoming increasingly significant. Thanks to its strategic location, stable financial environment, extensive vaulting infrastructure, and expanding role in the physical precious metals trade, it is emerging as another major gateway through which gold and silver flow into Asia.

In my view, this is about much more than new exchanges, vaults, or trading centers.

The more important shift is the direction in which physical metal is moving.

For decades, large quantities of precious metals flowed primarily into Western financial centers. Today, that flow is increasingly reversing, with gold and silver moving from Europe and North America toward Asia.

To me, this is one of the most significant structural changes in the precious metals market in recent years.

If this trend continues, Western markets may find it increasingly difficult to source physical metal when demand eventually accelerates again. Once physical gold or silver reaches Asia, it often remains there for many years and is far less likely to return to Western markets.

Where Did the Sold Silver Most Likely Go?

I don’t believe most of the silver ended up with new retail investors.

Instead, I think a large portion likely passed through bullion dealers, refiners, and wholesale distributors before ultimately reaching industrial users.

If I had to estimate, I would say roughly 20 to 60 million ounces may have found their way into industrial supply chains.

The exact figure is unknown, but this range seems realistic based on this year’s market developments.

That temporary influx may have provided some relief for manufacturers.

Companies gained access to additional physical metal without requiring higher mine production or a significant increase in recycling.

In other words, part of industrial demand was satisfied using silver that had already been mined years earlier and simply changed ownership.

It is also important to remember that no new silver was created.

Global above-ground silver stocks did not increase. The metal merely moved from investors to industrial consumers.

From a long-term perspective, I don’t think anything fundamental has changed.

If the world continues consuming more silver than is mined and recycled each year, additional metal will eventually have to come from investors or other available above-ground inventories.

How Much Could the Physical Silver Shortage Have Been Delayed?

This is probably the most important question.

The world consumes roughly one billion ounces of silver every year.

Even if 100 million ounces of physical silver were sold this year, that represents only a fraction of annual demand. More importantly, it wasn’t newly produced silver—it simply changed hands.

At the same time, investor sentiment deteriorated sharply.

After the steep price decline, many investors lost confidence, and investment demand for physical silver cooled significantly.

As a result, the market received temporary relief from two sources:

Additional physical supply from investors who sold.

Lower investment demand as many buyers stepped to the sidelines.

For these reasons, I believe this year’s wave of selling may have eased pressure on the physical market for several months and perhaps delayed a more severe shortage by around one year.

However, I do not believe it eliminated the long-term structural deficit.

In my opinion, that underlying imbalance remains essentially unchanged.

Why Might Next Time Be Different?

One aspect of this year’s events stands out to me.

Many of the investors who wanted to take advantage of this year’s exceptionally high prices have already sold their silver. If prices rise sharply again in the future, there may simply not be as many willing sellers as there were this year.

Not because no one will want to sell, but because a significant portion of the available physical metal has already changed hands during this year’s rally and subsequent correction.

That could mean that during the next major price increase, the market may not have access to the same additional supply of physical silver that temporarily appeared this year.

I believe this year’s wave of selling was, to some extent, a unique event.

If a large share of that physical silver has now moved into the hands of long-term investors—or into countries with consistently strong physical demand—the amount of metal available for resale during the next rally could be significantly smaller.

If that happens, the physical silver market could come under much greater pressure than it did this year.

My View

This year’s events reinforced one important lesson for me.

The price chart is important, but it never tells the whole story.

What matters even more is understanding where physical silver is actually coming from, who is willing to sell it, and where it ultimately ends up.

In my opinion, this year’s panic selling returned a meaningful amount of physical silver to the market and may have provided temporary relief for industrial consumers.

At the same time, the geographic balance of demand appears to be shifting.

While investment demand in the United States and Europe cooled sharply after the price collapse, Asia seems to be buying physical silver very aggressively.

New precious metals trading infrastructure is expanding in Hong Kong and Shanghai, while Singapore is becoming increasingly important as a major storage and distribution hub.

To me, it appears that the center of gravity of the physical precious metals market is gradually moving east.

That also raises another interesting possibility.

If the physical market really was under significant pressure and industry urgently needed additional metal, then this year’s sharp price decline may have provided large market participants with an ideal opportunity to bring physical silver back onto the market from weaker hands.

I’m not claiming that this is what actually happened, because there is no evidence to prove it.

However, I do think it is a possibility worth considering.

If this line of thinking is even partially correct, then this year’s selloff may have been more than just another normal market correction.

It may have represented one of the last major opportunities to acquire physical silver from investors while fear dominated the market.

Once that metal moves into industrial supply chains or into the hands of long-term investors in Asia, it may not return to the market in similar quantities during the next price rally.

For that reason, I do not believe this year’s events solved the long-term structural deficit in the silver market.

In my view, they merely postponed it.

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Production and Reserves Map

I have been following precious metals for more than ten years, and during that time I have experienced several major rallies as well as painful corrections. Every gold and silver price drop has followed a similar pattern, and every time, the same story repeats itself.

When prices are rising, most people believe they will continue rising forever. The media publishes optimistic headlines, investors become increasingly confident, and more people start buying simply because they do not want to miss the next move higher.

Then a correction arrives.

Suddenly, it feels as though the entire story is over. Optimism is replaced by fear, predictions of much lower prices appear everywhere, and many investors begin questioning their decisions. After every gold and silver price drop, many investors assume the bull market is over, even when the long-term fundamentals remain largely unchanged.

This is where it becomes fascinating to watch how quickly market sentiment changes. The very same people who were confidently claiming only a few months ago that silver was heading to $1,000 per ounce are now just as convinced it will fall to $20.

In reality, the market itself usually has not changed very much. What has changed is sentiment. And sentiment is one of the most volatile forces in financial markets.

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If You Have a Long-Term Horizon, Don’t Watch the Price Every Day

In my opinion, one of the biggest mistakes investors make is measuring their investment by its daily dollar value.

If you decided to invest in gold or silver for five, ten, or twenty years, then today’s portfolio value is not what matters most. What matters far more is how many ounces you own.

When you watch the chart every day, it becomes very easy to become a prisoner of your own emotions. One day prices fall 3% and you feel worried. The next day they recover 3% and everything seems fine again. Then another 6% decline follows, and the frustration returns.

In reality, nothing fundamental may have changed. Only the number on the screen has.

To be honest, I have never fully understood the purpose of monitoring every market move if your investment horizon is measured in years rather than days.

Prices will fluctuate. Sometimes they will rise sharply, sometimes they will fall significantly. But the number of ounces you own does not change.

And in the long run, those ounces may matter far more than whatever today’s chart or portfolio balance happens to show.

Why Most Investors Sell at the Worst Possible Time

In financial markets, those who remain calm while everyone else is panicking are often the ones who achieve the best long-term results.

Hedge funds and other large investors understand very well that sharp declines trigger strong emotions. When prices fall for several days or weeks, many investors begin checking the charts almost every hour. Each additional decline increases frustration, doubt, and eventually the desire to sell.

This is often the point where investors become what the market calls “weak hands.” They sell not because the long-term fundamentals have changed, but because they simply cannot handle the emotional pressure any longer.

Large investors often do the opposite. They take advantage of periods when nearly everyone else is willing to sell, allowing them to accumulate positions at much lower prices.

When the market eventually turns higher, sentiment improves and prices begin rising again. Many retail investors only return after much of the rally has already happened. It is not uncommon for them to buy back the same gold or silver at a much higher price than where they sold during the panic.

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Why a Correction Does Not Mean the Bull Market Is Over

One of the most common mistakes investors make is assuming that every significant decline automatically marks the end of a bull market. History tells a very different story.

Virtually every long-term bull market has been interrupted by several substantial corrections. Sometimes prices fell by 10%, sometimes by 20%, or even more. Yet many of those markets eventually continued making new highs.

These corrections often serve one important purpose: they remove investors who bought during periods of euphoria but were not prepared for normal market volatility.

If the long-term fundamentals have not changed significantly, a lower price alone is not evidence that the bull market is over.

In fact, periods dominated by fear and pessimism have often proven to be among the most important moments for long-term investors. These are the times when many people lose patience and sell, while disciplined investors are able to remain calm.

I Would Have Been Better Off If I Had Never Invested.”

I hear this quite often, especially after sharp declines in gold and silver.

At first glance, it sounds perfectly reasonable. When you look at your portfolio and see a loss, it is easy to think that you would have been better off never investing at all.

But there is another perspective that many people overlook.

A large number of people never buy gold or silver in the first place. They keep waiting for a “better opportunity,” more certainty, or the perfect moment. In most cases, that moment never arrives, and they remain spectators.

You may currently be experiencing a temporary loss, but you are still one step ahead. You own an asset that has the potential to appreciate over the long term, provided the reasons you invested have not fundamentally changed. Corrections are a natural part of investing, and periods of pessimism have often been followed by new bull markets.

People who never invest avoid temporary declines, but they also miss future gains. Meanwhile, inflation gradually erodes the purchasing power of their savings.

That is why I would focus less on today’s price and more on a simple question: Have the long-term fundamentals changed? If the answer is no, then today’s correction is simply another part of a journey that nearly every successful long-term investor has experienced.

Final Thoughts

If I could leave you with just one message, it would be this: do not let short-term emotions control your decisions.

Do not focus on the daily value of your portfolio. If your investment horizon is ten years or longer, one bad week or one bad month is unlikely to determine your long-term outcome.

Personally, I would ask one more question.

If you did not sell your silver when it was trading above $100 per ounce, what would be the logic behind selling it today below $60? If the reasons you originally invested remain unchanged, selling now simply turns a temporary paper loss into a permanent one.

It is also worth remembering one important fact: the number of ounces you own remains exactly the same. Only their current market price changes. Prices will fluctuate over the years—sometimes more, sometimes less. That is simply how financial markets work.

It is equally important to remember that temporary losses are nothing unusual. Even the world’s most successful investors, including Warren Buffett, have gone through periods when the value of their portfolios declined significantly. The difference is that they judged their investment decisions over years and decades—not over weeks or months.

The same is true for market sentiment. Today, fear and pessimism dominate. A few months from now, the mood could be completely different. The media will publish new bullish headlines, analysts will raise their price targets, and many people will regret not buying when everyone else was afraid.

If you’d like to gain a deeper understanding of the silver market and significantly strengthen your position in physical silver, I’ve written an investment guide for you.

Because in the end, what will matter most isn’t the price on the screen—it’s how many ounces of physical silver you own.

Silver Guide

Silver prices have pulled back from their yearly highs over the past few days, leading many investors to wonder whether something fundamental has changed. At first glance, the decline may appear negative, but the price chart alone never tells the whole story.

To understand what is really happening, we need to look at the Silver Futures Market. This is where a large portion of the global silver price is determined, and it often provides the best explanation for why prices can move in the opposite direction of long-term fundamentals over the short term.

Understanding the Silver Futures Market is essential because short-term price movements are frequently driven by trading activity, positioning, and investor sentiment rather than immediate changes in physical supply and demand.

Price Movements Are Primarily Driven by the Futures Market

Silver is a physical metal, but its price is largely determined on the COMEX futures exchange. Every day, contracts representing hundreds of millions of ounces of silver are traded there, even though only a small percentage ultimately results in physical delivery.

At first glance, this may seem unusual, but it is simply how futures markets operate. Most participants are not trading because they want to take delivery of silver. Instead, they are either speculating on future price movements or hedging their business exposure.

This has one important consequence. Short-term price movements often reflect financial market sentiment, hedge fund activity, and the opening or closing of large positions far more than actual changes in physical supply and demand.

That is why silver prices can decline for several weeks even though very little has changed in the physical market itself. Many of the short-term moves that eventually influence the entire market originate in the futures market.

What the Large Traders Are Doing

The weekly Commitment of Traders (COT) reports published by the U.S. Commodity Futures Trading Commission (CFTC) are among the most valuable sources of information about the futures market. They reveal how producers, dealers, hedge funds, banks, and other major participants are positioned.

According to the latest available COT report (as of June 23, 2026), total Open Interest stood at approximately 108,944 contracts. Producers and merchants held around 18,349 short contracts against 4,627 long contracts, while the Managed Money category held approximately 17,559 long contracts and 5,818 short contracts. This indicates that speculative capital remains largely positioned for higher silver prices, while commercial participants continue to hedge their market exposure.

Commercial participants have historically maintained a net short position. However, this does not necessarily mean they expect a major price decline. In most cases, these positions serve as hedges against future production or commercial obligations.

On the other side are hedge funds and other speculative investors. Their behavior often plays a significant role in driving sharp price movements. As prices rise, they typically increase their long positions. When momentum weakens, they frequently reduce those positions quickly, accelerating the decline.

An interesting observation is that current hedge fund positioning is nowhere near historical extremes. The market therefore does not appear to be experiencing excessive optimism or widespread panic, which is generally a healthier setup.

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The Paper Market and the Physical Silver Market Are Not the Same

One of the most interesting characteristics of the silver market is the gap between the volume of futures contracts and the amount of physical silver available for delivery.

On COMEX, registered silver inventories currently stand at roughly 90 million ounces, while open futures contracts represent approximately 545 million ounces. In other words, the volume of outstanding contracts is several times larger than the amount of silver that is actually registered and available for potential delivery.

The vast majority of futures contracts are either closed or rolled over before expiration, and only a small percentage ends in physical delivery.

Nevertheless, this imbalance illustrates the important role that paper trading plays in determining silver prices. Short-term price movements are often driven primarily by the activity of large financial participants, while conditions in the physical market tend to change much more gradually.

So far, the system appears to be functioning, and COMEX has continued to handle these imbalances successfully. However, there have been instances in the past where some large futures positions were settled outside the exchange through private agreements, with participants accepting cash compensation or alternative settlement arrangements instead of physical silver. Such settlements are fully permitted under market rules, but they demonstrate that under certain circumstances both parties may find it preferable to resolve positions outside the standard physical delivery process.

The real test of the system would come if a significantly larger number of market participants insisted on taking physical delivery and refused to close their positions regardless of any financial incentive or premium offered. In such a scenario, attention would shift away from paper contracts toward the actual amount of available metal, and only then would the relationship between the futures market and the physical silver market truly be tested.

What I Believe This Means

The most interesting aspect of the current situation is that silver prices have declined over the past few days while the long-term fundamentals remain very strong.

Demand continues to be supported by industrial consumption, solar panel manufacturing, electronics, and ongoing investment buying.

In my view, this suggests that the recent decline is driven far more by changing sentiment in the futures market than by any deterioration in the physical silver market.

History repeatedly shows that periods when prices temporarily diverge from fundamentals do not last forever. Eventually, these differences tend to narrow.

Of course, no one can predict exactly when that will happen. In the short term, silver prices may remain volatile, and further swings should not be ruled out. From a long-term perspective, however, I do not currently see evidence that the core investment case for silver has changed.

On the contrary, if the structural supply deficit continues, industrial demand keeps growing, and investment demand remains strong, today’s price fluctuations may eventually be viewed as nothing more than a normal correction within a long-term bull market rather than the beginning of a lasting bear market.

Although the recent decline from the highs may appear significant, it is important to view it within a broader time frame. Even after this correction, silver is still trading at roughly the same levels seen about seven months ago. From a longer-term perspective, I do not see anything that suggests the start of a new bear market. Instead, the recent price action looks more like a typical correction following a strong advance, which is quite common given silver’s historically high volatility.

In addition, short-term price movements remain heavily influenced by the paper futures market, which can temporarily diverge from the underlying fundamentals of the physical silver market.

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The Gold & Silver Paper Market has once again reinforced my belief that financial markets often do not behave the way common sense or economic fundamentals would suggest.

When tensions escalated between the United States, Israel, and Iran, most investors expected precious metals to be among the biggest winners. After all, gold and silver have been regarded as safe-haven assets for decades during periods of uncertainty.

But reality turned out to be very different.

Oil prices surged on concerns about potential supply disruptions in the Middle East, yet gold and silver failed to deliver the kind of rally many investors had anticipated. Instead, both came under pressure.

And very quickly, an explanation emerged.

The market was supposedly pricing in a potential slowdown in the global economy, which would reduce industrial demand for silver. Many investors accepted this narrative and concluded that the lower price made perfect sense.

But throughout the entire period, one question kept coming back to me.

Is it really that simple?

Yes, silver is an industrial metal. If the global economy were to slow, part of its industrial demand could temporarily weaken.

But that is only part of the story.

At the same time that geopolitical tensions, uncertainty, and fear increase, investment demand for safe-haven assets should also rise significantly.

To me, that is the part of the equation many people overlooked.

If investors were genuinely concerned about war and growing global instability, it would seem reasonable to expect increased investment demand to at least partially offset weaker industrial demand.

But that didn’t happen.

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Then Came the Ceasefire

This is where the story stopped making sense to me entirely.

When reports of a ceasefire and easing tensions emerged, I expected at least some improvement in sentiment toward precious metals.

Instead, prices declined even further.

And once again, a new explanation appeared.

Safe-haven assets were supposedly no longer needed because the risk of war had diminished.

In other words...

When there was war, it was considered bearish for precious metals.

When peace negotiations began, that was also considered bearish.

War was bearish.

Peace was bearish.

Both scenarios produced exactly the same outcome.

Moments like these make me wonder whether markets are truly reacting to fundamentals—or whether the narratives are simply adjusted afterward to explain whatever price action has already occurred.

The Gold & Silver Paper Market and Investor Sentiment

One of the strongest forces in financial markets is investor psychology. Markets are driven not only by fundamentals, but also by emotions, expectations, and perceptions about the future.

When prices begin to fall sharply, many investors become nervous. Some sell out of fear of even larger losses, while others postpone buying because they expect prices to fall further. Negative sentiment feeds on itself, creating a vicious cycle in which price influences psychology, and psychology drives further price movements.

In my view, this is often the point where fundamentals take a back seat. Instead of focusing on supply, demand, or long-term trends, emotions begin to dominate. Fear replaces rational analysis, and market sentiment shifts.

To me, this is far more important than any short-term price movement. Sentiment often determines how investors behave over the following weeks or months, regardless of whether the underlying fundamentals have actually changed.

When sentiment turns negative, trading in the paper market can have an even greater influence on short-term price action.

The Paper Market Has Enormous Influence

I have long believed that short-term precious metals prices are heavily influenced by trading in the paper market. A large share of daily trading does not involve physical gold or silver, but rather futures contracts, options, and other financial derivatives whose primary purpose is speculation on price movements—not the delivery of physical metal.

As a result, short-term prices do not always accurately reflect the true balance between physical supply and demand. We can witness record gold purchases by central banks, an ongoing structural deficit in the silver market, and rising demand for physical metals around the world, while prices continue to decline or move sideways.

That is why I do not judge the market solely by daily price movements.

Why Could the Paper Market Be So Important?

One possible reason is the desire to maintain confidence in the fiat monetary system. For centuries, gold and silver have served as alternative forms of money. When their prices rise significantly over long periods, they may signal that the purchasing power of fiat currencies is weakening. If price increases can be suppressed—or volatility increased—through paper-market trading, it may discourage some investors from moving into precious metals and help preserve confidence in the existing financial system.

Another possible explanation is the desire to maintain stability across financial markets. Sharp increases in gold and silver prices are often viewed as warning signs of rising uncertainty, inflation, or declining confidence in the economy. If precious metals were to rise steadily with few corrections, more investors might shift capital away from stocks, bonds, or cash and into physical metals. From this perspective, suppressing precious metals prices could be seen as one mechanism that helps keep capital invested in traditional financial assets.

This is not an established fact, but rather an interpretation shared by many analysts and market participants.

Short-Term Price Action Isn’t Everything

The longer I follow financial markets, the less importance I attach to every daily price movement.

The media narrative changes almost every week.

One week, the problem is war.

The next week, it is peace.

One week, inflation.

The next, interest rates.

The explanations constantly change, yet prices often continue moving in the same direction.

That is why I focus much more on long-term fundamentals.

On the condition of the physical market.

On rising government debt.

On central bank gold purchases.

On the long-term structural deficit in silver.

And on the gradual erosion of confidence in fiat currencies.

My Perspective

Recent events have once again strengthened my conviction that short-term sentiment can overwhelm fundamentals for surprisingly long periods of time. Markets do not always move according to what economic logic would suggest. More often, they are driven by emotions, expectations, and investor sentiment rather than by the underlying data.

That is why I try not to be influenced by every sharp price move or every new headline attempting to explain it. Daily fluctuations may be dramatic, but from a long-term perspective they are often just noise that distracts from what truly matters.

History has repeatedly shown that market sentiment can change very quickly. What most investors take for granted today may be viewed completely differently just a few months from now. That is why I focus on the bigger picture rather than on day-to-day market movements.

And it is often during periods when investors lose patience, fear dominates, and fundamentals are pushed into the background that the most attractive long-term investment opportunities emerge. Those are the moments when staying calm is the hardest—but they are also the moments when patient investors may gain the greatest advantage.

As the physical market continues to grow, the influence of The Gold & Silver Paper Market on price discovery may gradually diminish.

According to available data, the purchasing power of the U.S. dollar has declined by roughly 30% since 2020. At the same time, U.S. national debt has surpassed $40 trillion, while the federal government now spends more than $1 trillion annually on interest payments alone. Meanwhile, central banks around the world are buying gold at a pace not seen in modern history.

At the same time, more countries are seeking to reduce their dependence on the U.S. dollar by expanding their gold reserves and building alternative financial infrastructure for international trade.

This does not mean that the world is about to abandon the dollar overnight. The U.S. dollar remains the dominant global reserve currency. However, for the first time in decades, there appears to be a genuine effort to develop an alternative system that is not entirely dependent on a single reserve currency.

It is this combination of rising U.S. debt, record central bank gold purchases, and the development of new payment systems that makes the current situation so remarkable.

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Central Banks Are Buying Gold at a Record Pace

One of the strongest signals of recent years has been the record pace of gold purchases by central banks. According to the World Gold Council, central banks have purchased more than 1,000 tonnes of gold per year for three consecutive years. Such volumes have not been seen since the world operated under a very different monetary system.

China has played a particularly significant role. The People’s Bank of China increased its gold reserves for 19 consecutive months and now officially holds more than 2,300 tonnes of gold. However, China is far from alone. Poland, India, Türkiye, the Czech Republic, and many other countries have also significantly expanded their reserves. Although each country has its own motivations, they all share the goal of strengthening the stability of their foreign exchange reserves.

Unlike government bonds or foreign currencies, gold is not the liability of any government or central bank. It cannot be printed, it cannot be devalued by the decision of a single institution, and its value is not directly tied to the financial health of any particular country. For centuries, these characteristics have made gold one of the world’s most trusted stores of value.

Gold’s importance increased further after 2022, when the freezing of part of Russia’s foreign exchange reserves demonstrated that foreign-held assets could become geopolitical tools under certain circumstances. Since then, many central banks have begun reassessing how much of their reserves should be held in assets that are not dependent on the decisions of another country. As a result, gold has once again moved to the center of attention.

China Is Building an Alternative to the Dollar-Based System

Alongside expanding its gold reserves, China is investing heavily in its own financial infrastructure. The objective is not simply to strengthen the role of the yuan, but to establish a system that enables international trade with less reliance on the U.S. dollar.

One of the key projects is the Cross-Border Interbank Payment System (CIPS). This network allows banks to settle international transactions in Chinese yuan without relying exclusively on the traditional U.S. dollar infrastructure. As more financial institutions join the system, its importance continues to grow.

At the same time, China is encouraging trade settlements in national currencies, particularly with partners across Asia, the Middle East, Africa, and among BRICS countries. Every transaction settled in yuan rather than dollars gradually reduces the dollar’s role in international trade. While this transition remains gradual, the long-term trend is becoming increasingly evident.

Another significant development is the expansion of Hong Kong as a major global hub for gold trading. A state-backed settlement system for precious metals is being developed there with the ambition of competing with established Western markets, particularly London. Gold may therefore serve not only as a reserve asset but also as one of the foundations of a new financial infrastructure.

According to some analysts, China is not attempting to restore the traditional gold standard, under which every unit of currency could be exchanged for a fixed quantity of gold. A more likely objective is to strengthen confidence in the yuan by supporting it with substantial gold reserves alongside a modern payment system. If this strategy succeeds, countries trading with China may have greater incentives to use the yuan as an alternative to the U.S. dollar.

In my view, the combination of expanding gold reserves, developing payment infrastructure, and increasing trade in national currencies suggests that China is not preparing a sudden challenge to the dollar’s dominance. Instead, it is building a long-term alternative that could gradually reshape global trade over the coming years.

No Major Gold Announcement Came. But the Questions Remain.

Ahead of this year’s July 4 celebrations, speculation emerged that the United States might unveil a major initiative related to gold or the monetary system as part of preparations for the country’s 250th anniversary in 2026. Public discussion included the possibility of a comprehensive audit of U.S. gold reserves, a greater role for gold in public finances, or even proposals for government bonds partially backed by gold.

None of these developments materialized.

Nevertheless, the discussion has not ended. On the contrary, it continues to gain momentum. Rising national debt, record interest costs, and the ongoing trend toward de-dollarization are leading more investors to ask whether the United States will eventually be forced to introduce more fundamental solutions.

Another topic that regularly returns is the U.S. gold stored at Fort Knox. The last comprehensive audit involving a full physical verification of the gold reserves was conducted in the 1950s. Since then, various inspections, reviews, and visits by selected officials have taken place, but none has constituted a new, independent, full-scale audit under modern standards.

This lack of a comprehensive audit continues to fuel speculation. Some investors believe that the actual amount of gold could be lower than the official figures suggest. Others remain convinced that the reserves are intact and that the issue is simply one of transparency. However, there is currently no publicly available evidence that conclusively supports either view.

Whether the speculation surrounding Fort Knox ultimately proves true or false, one fact remains undeniable: trust is the foundation of every monetary system. That is why investors today are watching not only interest rates and inflation but also the actions of central banks, record gold purchases, and the emergence of new payment systems. Looking back years from now, these developments may well prove to have marked the beginning of a new chapter in global finance.

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Judy Shelton and Her Longstanding Support for Gold

One of the most prominent figures in this discussion is economist Judy Shelton, whom Donald Trump nominated to the Federal Reserve Board of Governors. Shelton has long criticized the current fiat currency system and has consistently advocated for a greater role for gold.

In April, she responded to a question on X about a possible return to a gold standard by writing:

“Thinking something like that. But in 2026. Stay tuned.”

While the post does not reveal any specific plan, its reference to 2026 has fueled considerable speculation among investors.

Trump’s “Golden Gift”

Donald Trump later shared a post featuring a giant golden eagle over the White House with the caption:

“A Golden Gift to the White House for its 250th Birthday Year!”

Officially, the image is an AI-generated illustration celebrating America’s 250th anniversary. However, it immediately sparked speculation across social media that it could carry symbolism related to gold or hint at a major economic announcement.

The post itself does not confirm anything of the sort. Nevertheless, its timing added further momentum to the ongoing discussion.

Scott Bessent: “July 4 Deserves More Than Just a Celebration”

Another development that caught investors’ attention came from Treasury Secretary Scott Bessent, who suggested that this year’s Independence Day celebrations could represent more than simply commemorating the nation’s anniversary.

On June 23, he stated:

“We should encourage innovation that strengthens the dollar, improves efficiency, expands access, and preserves the integrity of the financial system.”

His remarks focused publicly on modernizing the financial system. Some investors have interpreted them as being connected to speculation about monetary reform, new government debt instruments, or a greater role for gold. However, nothing in his statements directly suggests that he was announcing a return to a gold-backed monetary system.

Fort Knox and America’s Gold Reserves

In recent months, the U.S. gold reserves stored at Fort Knox have once again become the focus of public attention. Donald Trump and several members of his circle have repeatedly called for greater transparency and for the reserves to be verified. As a result, discussions about a potential audit have become far more prominent than they have been in previous years.

Although no official audit has been announced, the renewed public debate surrounding America’s gold reserves has added to investor speculation. If the United States were to assign a more significant role to gold within the financial system in the future, confirming the quantity and condition of its gold reserves would be one of the most logical first steps.

The Trump Administration and Gold

Donald Trump has long been known for his appreciation of gold. Gold features prominently throughout his properties, offices, and private residences, and he has often described it as a symbol of strength, prosperity, and success.

What has attracted investors’ attention, however, is that discussions about gold have become far more common during his current administration than in previous years. Topics such as gold-backed government bonds, gold’s role in the monetary system, and the potential revaluation of America’s gold reserves have entered the public debate. Although no concrete measures have been announced, many investors view the current administration as being more open to discussing a greater future role for gold within the global financial system.

America’s 250th Anniversary

This year’s July 4 is unlike any ordinary Independence Day. The United States is celebrating the 250th anniversary of its founding—one of the most significant milestones in the nation’s history. Such landmark anniversaries are often used not only for celebrations but also to unveil long-term visions, strategic initiatives, or historic projects.

For this reason, some investors believe that if the administration were planning to announce a major initiative involving the economy, the U.S. dollar, or gold, the symbolic date of July 4 would provide an especially fitting opportunity.

Gold Call Options Continue to Surge

The options market is also attracting growing attention.

The number of open gold call options with strike prices of $10,000, $15,000, and especially $20,000 per ounce, all expiring in December on COMEX, has climbed to approximately 30,500 contracts and continues to rise.

This suggests that a portion of investors is betting on the possibility of a significant increase in the price of gold before the end of the year.

The U.S. Mint Surprises with the Pricing of New Medals

Another noteworthy development is the U.S. Mint’s upcoming release scheduled for July 16. The Mint will introduce commemorative Liberty Bell medals priced at approximately $20,000 per ounce of gold and $1,500 per ounce of silver.

At today’s market prices, these figures are remarkably high. Silver is currently trading at around $60 per ounce, meaning the commemorative silver medal carries a premium of more than 2,000% above the value of the metal itself. Anyone purchasing it purely as a silver investment would be paying an enormous premium over the spot price.

Of course, these may simply be collectible products with substantial numismatic value. Even so, some investors are questioning why the prices were set at these particular levels.

Latest analyses are available here:

Silver Dominion: Gold & Silver

I analyze gold and silver with a focus on the growing disconnect between the physical and paper markets, where paper claims today vastly exceed the amount of physically available metal.

U.S. Debt Continues to Rise

The United States continues to face record levels of national debt, which many economists believe are unsustainable over the long term. Although the debt can still be financed for several more years through new bond issuance and economic growth, doing so does not solve the underlying problem—it merely postpones it.

At the same time, central banks around the world are purchasing gold at the fastest pace seen in decades, steadily increasing gold’s share of their reserves. According to many analysts, this reflects an effort to reduce dependence on the U.S. dollar while preparing for potential changes in the global financial system.

It is the combination of record U.S. debt, rising interest costs, and unprecedented central bank gold purchases that has led some investors to speculate that the global monetary system could undergo significant changes in the years ahead.

Why Is Gold Falling Right Now?

Another point attracting attention is the recent performance of the gold price itself. Over the past several days, the market has experienced a notable correction, forcing many investors out of their positions.

Some analysts and investors point out that, historically, sharp declines in gold prices have sometimes occurred before major developments or announcements involving gold’s role in the financial system. These corrections weakened market sentiment and prompted many investors to exit their positions.

Given the current combination of events, some investors are watching this latest pullback with particular interest, wondering whether it could be preceding something more significant.

What Should Investors Take Away from This?

When all of these developments are viewed together, they create an intriguing picture:

Judy Shelton has spoken about 2026 and a greater role for gold.

Donald Trump shared a post about a “Golden Gift” for America’s 250th anniversary.

Scott Bessent suggested that July 4 could bring more than just celebrations while emphasizing the strengthening of the financial system.

Bullish bets on gold are rising sharply on COMEX.

The U.S. Mint has introduced unusually expensive commemorative gold and silver medals.

Central banks continue to buy gold at record levels while the United States faces historically high debt.

None of these developments, on their own, confirms that an announcement related to gold will be made on July 4. Together, however, they form a combination of circumstances that helps explain why many investors are watching this date so closely.

If a major announcement were to occur—such as a revaluation of U.S. gold reserves, a new form of gold-linked government bonds, or another significant reform of the financial system—it could become one of the most important events for the gold market in many years.

Until then, however, everything remains speculative, and investors will have to wait for any official announcements.

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This is where the story starts to become truly fascinating.

Call options on gold with a strike price of $20,000 per ounce have now surpassed 30,000 open contracts. For such an extremely distant strike price, this is unprecedented in the history of the gold options market.

And it is not just the $20,000 strike.

Exceptionally high open interest can also be seen at $10,000 and $15,000 per ounce.

Why Is Anyone Buying These Options?

Some traders argue that these options are extraordinarily cheap.

The lower the market believes the probability of success to be, the lower the option premium becomes.

It is similar to betting on a football match.

Imagine an underdog still trailing in the 90th minute. The chances of that team winning would be close to zero. A relatively small bet could generate an outsized return if an almost impossible comeback occurred.

The same logic applies to options.

If, for any reason, gold were to approach $20,000 per ounce, the value of these options could increase by hundreds or even thousands of percent.

For a position of this size, we are no longer talking about millions of dollars, but potentially billions in profits.

At first glance, it is therefore understandable why someone might buy these options.

Why Is This So Unusual?

There is, of course, another possible explanation.

For a large hedge fund or institutional investor, such a position could simply represent relatively inexpensive insurance against an extreme tail-risk scenario.

However, this is precisely where several questions arise.

Professional investors generally do not like spending money on trades they expect to lose with near certainty.

Historically, the highest open interest has almost always been concentrated around strike prices close to the current market price of gold.

Strike prices this far away have traditionally been a rarity, typically attracting only dozens or, at most, a few hundred contracts.

But there is an even more important point.

As expiration approaches and the probability of success declines, open interest in these types of options normally decreases. Investors close their positions because time works against them.

This time, however, the exact opposite is happening.

Instead of declining, open interest continues to rise.

From 11,000 to More Than 30,000 Contracts

This is precisely why these options have begun attracting attention from major financial media.

The first significant reports appeared in mid-February this year, when open interest stood at approximately 11,000 contracts. Even then, the position was considered highly unusual and sparked widespread discussion.

(Source: Bloomberg / Yahoo Finance)

Since then, however, the situation has changed dramatically.

Gold initially continued its strong rally and reached new all-time highs before entering a correction and moving lower.

From the perspective of the options market, one would normally expect open interest to decline as gold prices fall and time to expiration becomes shorter.

But that is not what happened.

Today, open interest has surpassed 30,000 contracts.

Gold is trading below where it was a few months ago, less time remains until the end of 2026, and, according to most market participants, the probability of reaching $20,000 per ounce is now even lower.

Yet someone continues to systematically add to these positions.

Is this simply a cheap bet on an extremely unlikely outcome?

Or is someone hedging against an event that the broader market still considers virtually impossible?

At this point, no one knows the answer.

One thing, however, is certain.

Open interest of this magnitude at $10,000, $15,000, and especially $20,000 per ounce has very few historical precedents in the gold options market.

Markets Are Not Always as Efficient as We Are Told

We often hear that financial markets instantly reflect all publicly available information. If that were entirely true, it would be impossible to consistently generate above-average returns or anticipate major events before they occur.

Theory, however, is one thing.

Reality sometimes tells a different story.

Unusual Trades Before Major Events

Financial history offers numerous examples where unusually large trades appeared shortly before significant geopolitical events, only making sense in hindsight.

One of the most recent examples occurred on the prediction platform Polymarket, where exceptionally large bets appeared shortly before the U.S. strikes on Iran. Around the same time, betting volume also surged on the possibility of the death of Iran’s Supreme Leader, Ali Khamenei. These trades raised questions among investors about whether some market participants possessed better information than the general public.

Similar situations have also been observed in the oil market. Ahead of several announcements involving ceasefires or de-escalation in the Middle East, unusually accurate trades anticipated sharp declines in oil prices before the news became public.

Nor are these isolated cases.

Before Russia’s invasion of Ukraine in February 2022, analysts also pointed to unusually heavy trading activity in crude oil, natural gas, and defense-related stocks. Although no evidence of insider trading was ever proven, the timing of these trades sparked widespread discussion among investors.

A great deal of attention was also drawn to an academic study published after Hamas’ attack on Israel on October 7, 2023. The authors identified unusually large short positions in Israeli equities immediately before the attack and concluded that the trading pattern was sufficiently abnormal to warrant further investigation.

Coincidence... or Something More?

Could all of this simply be coincidence?

I’ll let each reader draw their own conclusions.

Why I Am Watching the Options Market

This is precisely why I believe it is important to monitor not only the price of gold itself, but also what is happening in the options market.

It may ultimately mean absolutely nothing.

However, if someone continues increasing positions at $10,000, $15,000, and especially $20,000 strike prices while gold prices are declining and time to expiration is steadily running out, it deserves attention.

History has shown more than once that unusual movements of large amounts of capital sometimes precede events whose true significance only becomes clear in hindsight.

Gold Revaluation? My View on the Most Likely Scenario

Although there has been growing speculation about a potential gold revaluation to $20,000 per ounce, I do not consider this to be the most likely outcome. Such a move would dramatically increase the accounting value of U.S. gold reserves, but it could also create a range of unintended consequences. It could undermine confidence in the current monetary system, increase uncertainty across financial markets, and bring not only benefits but also significant risks for the United States.

A different scenario appears far more plausible to me.

The U.S. Treasury still values its gold reserves at the historical official price of approximately $42.22 per ounce. If those reserves were simply revalued to their current market price for accounting purposes, it would make much more economic sense in my view.

This possibility has been discussed publicly several times in recent months. U.S. Treasury Secretary Scott Bessent has also highlighted the large gap between the historical book value of America’s gold reserves and their actual market value.

Such a move would not represent a return to the gold standard or establish a new official gold price. However, it would send a very strong signal that the United States is once again recognizing gold as a strategic asset.

For gold itself, this would likely be a highly positive development. And because gold and silver have historically moved within the same macroeconomic environment, any positive impact on gold would most likely spill over into silver as well.

Why I Believe July 4 Is the Key Date

If something along these lines is going to happen, it is difficult to imagine a more symbolic date than July 4, when the United States celebrates the 250th anniversary of its founding.

For that reason, I believe that if the Trump administration intends to announce any significant change regarding the role of gold, this anniversary would be an ideal opportunity.

However, if no such announcement is made by July 4, I believe the probability of a major shift in the United States’ approach to gold during Donald Trump’s administration will decline significantly.

That does not mean the broader story loses its importance.

Even if nothing ultimately happens, the very fact that gold is once again being discussed in connection with U.S. Treasury bonds, the federal balance sheet, the Treasury Department, and unusually large options positions suggests that its role within the global financial system is once again becoming a subject of serious debate.

And in the end, that may prove to be more important than any single announcement.

Perhaps July 4 will pass without a historic moment.

Perhaps there will be no surprise at all.

But if the past few months have taught us anything, it is that far more is happening around gold than the price chart alone would suggest.

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When prices fall like this, many investors panic and focus only on the chart. I prefer to look at what is happening behind the scenes.

China Is Limiting Speculation While Encouraging Physical Gold

Gold and Silver Prices have come under pressure after several major Chinese banks recently tightened the rules for leveraged trading in gold and silver. Guangfa Bank, for example, has increased margin requirements to as much as 140%, while Bank of China and Huaxia Bank have raised them to around 120%. These measures apply to trading on the Shanghai Gold Exchange.

For many leveraged traders, this means only two choices: deposit additional capital or close their positions. These forced liquidations can increase short-term selling pressure on gold and silver, which may be one of the reasons behind the current price decline.

At the same time, however, China is doing something that I find far more interesting.

On one hand, it is tightening the rules for leveraged trading in precious metals. On the other hand, it is actively encouraging the purchase of physical gold by lowering entry thresholds for retail investors, extending trading hours, reducing transaction costs, and introducing additional measures designed to make long-term gold accumulation easier for ordinary citizens.

To me, all of this suggests that China is trying to reduce speculation in the paper precious metals market while encouraging its citizens to own physical gold and silver instead.

Paper markets can move prices sharply higher or lower within hours, but over the long term, the true value of gold and silver is ultimately determined by demand for the physical metal.

That is why I believe that, although we are currently witnessing a sharp sell-off, Gold and Silver Prices could ultimately benefit from these developments over the long term as demand for physical precious metals continues to grow.

Why I Prefer Physical Gold and Silver

This is exactly why my primary focus remains on physical gold and silver.

Statistics consistently show that most retail traders eventually lose money through active trading. Financial markets are highly competitive environments where individual investors compete against professional traders, sophisticated algorithms, and large institutions with vastly superior information and capital.

Physical gold and silver work differently. Once you own them, you cannot panic-sell them with a single mouse click and then buy them back a few days later when market sentiment turns euphoric. I see that as one of the greatest advantages of owning physical precious metals. It encourages long-term thinking and helps investors avoid emotional decision-making.

In many ways, paper markets resemble a casino. Some participants make money, but statistically, most lose over time. That often leads me to ask a simple question: why trade something when the odds suggest that the majority of participants will eventually lose?

My strategy is much simpler: buy physical gold and silver, store them safely, and give the investment time.

Short-term price swings will come and go. In a few years, very few people will remember today’s market volatility. What matters far more are the long-term trends—what governments are doing, how central banks are behaving, how demand for physical precious metals is evolving, and how the global financial system is changing.

The future of gold and silver will ultimately be decided there—not in the daily fluctuations of the paper markets.

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When I first saw those prices, I thought it had to be a mistake.

Then I looked at them again.

And then one more time.

That was when it occurred to me that whatever the explanation may be, someone had to know that figures like these would immediately attract the attention of precious metals investors.

On July 16, the United States Mint will release special Liberty Bell medals commemorating the 250th anniversary of the United States.

There is nothing unusual about that.

The unusual part is the pricing.

The prices work out to approximately $20,000 per ounce of gold and $1,500 per ounce of silver. Even more interesting is the fact that the implied gold-to-silver ratio is around 13:1, remarkably close to the historic monetary ratios that were used for centuries in different parts of the world.

And it is precisely these numbers that have sparked lively debate among precious metals investors.

Who Would Buy Gold at $20,000?

That was the first question that came to my mind.

Does the U.S. Mint really believe there are buyers willing to pay several times the current market price for gold?

If so, why?

And if not, why set the prices this way in the first place?

These are the same price levels that have appeared for years in discussions about a potential gold revaluation and the future role of precious metals within the monetary system.

That is why these prices have attracted so much attention.

Not because anyone expects gold to immediately trade at $20,000.

But because these numbers closely resemble scenarios that have been discussed within the precious metals community for many years.

And there is another question.

If the U.S. Mint understands that only a very limited number of people are likely to purchase these products at such prices, why release them with this pricing structure at all?

Why July 16, 2026?

Why during the celebrations of America’s 250th anniversary?

Why create a product that instantly triggers a debate about $20,000 gold and $1,500 silver?

It is entirely possible that this is simply a collector’s edition and that any similarities are purely coincidental.

But it is also possible that the real value of these medals does not lie in the number of units sold.

Perhaps the discussion they have generated is far more interesting.

And that is something the U.S. Mint likely understood in advance.

Coincidence? Perhaps.

Yet there seem to be an increasing number of coincidences.

For years, various analysts have argued that if the U.S. dollar were ever meaningfully linked to America’s gold reserves again, the price of gold would likely need to be far higher than it is today.

Not 20% higher.

Not 50% higher.

But several times higher.

That is why figures around $10,000, $15,000, and $20,000 per ounce repeatedly appear in various valuation models.

And now a U.S. Mint product appears with a pricing structure that closely resembles those very levels.

The Call Options

This immediately reminded me of a recent article I wrote.

You can read my analysis of the unusual $20,000 gold call options here:

A few days ago, I discussed the unusually large open interest in gold call options with a strike price of $20,000 per ounce expiring in December 2026.

These were not just a handful of contracts.

There are tens of thousands of contracts representing millions of ounces of gold.

Even more remarkable is the fact that open interest at these extremely distant strike prices continues to grow and is reaching new record highs.

First came years of discussion about a possible gold revaluation.

Then comes the options market, with thousands of contracts betting on $20,000 gold before the end of 2026.

And now the pricing of new U.S. Mint medals.

Each of these developments individually may prove nothing.

Taken together, however, they create an interesting picture.

The number $20,000 per ounce is not appearing in just one place.

It seems to be appearing more and more often.

If Gold Were Revalued, Would We Know in Advance?

That is another question I keep asking myself.

If there truly were a plan to revalue America’s gold reserves, would the government openly discuss it months or even years in advance?

History suggests otherwise.

Major monetary changes are often announced only when they are ready or already underway.

In 1933, Roosevelt first restricted private gold ownership and only later changed the official price of gold.

In 1971, Nixon effectively closed the gold window overnight and ended the dollar’s convertibility into gold.

Neither of these actions was announced years ahead of time.

The reason is obvious.

If a government publicly announced plans to dramatically increase the official value of gold, investors would immediately rush into gold, silver, and mining shares.

Markets would react long before the actual decision.

That is why central banks and governments rarely announce sensitive monetary changes far in advance when doing so could trigger speculation, panic, or massive capital flows.

Perhaps that is exactly why the pricing of these new U.S. Mint medals attracted so much attention.

Not because they prove that a gold revaluation is coming.

But because if something like that were ever being prepared, history suggests that most people would not know about it beforehand.

Why 2026?

The timing is fascinating.

The 250th anniversary of the United States.

Record government debt.

The largest central bank gold purchases in decades.

Rising geopolitical tensions.

Growing debates about the future of the U.S. dollar.

And in the middle of all this appears a product that immediately sparks discussion about $20,000 gold and $1,500 silver.

Perhaps it means nothing.

But if I wanted to design a product specifically to provoke that exact debate among precious metals investors, I would probably do something very similar.

And Then There Is Donald Trump

This is where another interesting connection appears.

Donald Trump rarely thinks small.

During his current term, he established a Strategic Bitcoin Reserve for the United States.

He has openly stated that he wants America to become the world’s leading center for cryptocurrencies.

The year 2026 marks the 250th anniversary of the United States, and the Trump administration has made it one of the defining themes of its term.

In June 2026, the first UFC event in White House history was even announced, scheduled to take place as part of the America 250 celebrations.

Just a few years ago, something like that would have sounded like satire.

There have even been proposals for a $250 banknote featuring Donald Trump’s portrait.

Whatever one’s opinion of him may be, one thing is difficult to deny:

He enjoys being associated with major historical moments.

That is why I wonder whether he would pass up the opportunity to oversee a potential revaluation of America’s gold reserves.

If something like that were ever to happen, it would not be just another economic policy decision.

It would likely be one of the most significant monetary events of recent decades.

The kind of event that would still be discussed in economics textbooks many years from now.

Conclusion

I want to emphasize that this is purely speculative.

I am not claiming that any of these scenarios will actually unfold.

I am simply connecting observations and discussing possibilities that are theoretically conceivable.

History has repeatedly shown that the biggest changes often arrive when very few people expect them.

It is also possible that there is nothing more behind this than a well-executed marketing strategy. The U.S. Mint may have been fully aware that a price equivalent to roughly $20,000 per ounce of gold would immediately attract the attention of precious metals investors. During the celebrations of the 250th anniversary of the United States, such a debate could be an ideal way to capture the interest of the media, collectors, and investors while generating significant publicity around the entire release.

One question, however, is not so easy to answer: the continued growth in gold call options with a $20,000 strike price expiring at the end of 2026.

At present, open interest in these $20,000 call options has already reached 28,212 contracts. Despite the recent decline in the gold price and the steadily shrinking amount of time remaining until expiration, open interest continues to grow.

This is likely one of the largest concentrations of open interest ever seen at such an extremely distant strike price in the history of the gold options market. Why this is happening and what exactly is driving it remains unknown to everyone except the holders of those positions.

Whether this is merely a series of coincidences, clever marketing, or something more significant is something I will leave for each reader to decide.

As the saying goes, it is better to be prepared than surprised.

Further Reading:

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https://silverdominion.com/

At first glance, this may seem like an unremarkable piece of news from the precious metals sector.

Its significance, however, could be far greater than it appears today.

Singapore is launching a new system for trading, settlement, and storage of physical gold at a time when central banks are purchasing record amounts of the metal and an increasing share of global demand is coming from Asia.

Many precious metals investors have been waiting for a development like this for years. Some even doubted that a meaningful alternative to traditional centers such as COMEX and the LBMA would ever emerge.

This is not just about Singapore.

It is about where the true center of the global gold market may be located in the future.

The Gold Market Is Changing

For most of modern history, the gold market has been dominated by two major centers: London through the LBMA and New York through COMEX.

A large portion of the world’s gold reserves, trading activity, and price discovery has been concentrated in these markets.

Today, however, the situation is very different from what it was twenty years ago.

The largest buyers of gold are no longer primarily Western investors. Central banks, Asian investors, and countries seeking to reduce their dependence on the U.S. dollar are playing an increasingly important role.

Demand for physical gold is shifting eastward, while much of the infrastructure has remained concentrated in the West.

This is where Singapore could play an important role.

Why Singapore?

Singapore sits at one of the world’s most important trade crossroads between India, China, and Southeast Asia.

Thanks to its political stability, strong property rights, and highly developed financial system, it has become a natural hub for trade, finance, and wealth storage.

For investors, traders, and central banks, it represents an extremely attractive location.

If more gold continues to be stored there, a growing share of trading activity may gradually follow.

And wherever physical metal accumulates, the importance of the surrounding market often grows over time.

What Does This Mean for the LBMA?

London remains the heart of the global gold market today.

Its immense liquidity, credibility, and decades of established infrastructure provide a position that is not easily challenged.

A significant portion of the world’s gold reserves is held there, and a large share of global trading still takes place within its system.

Yet no dominant financial center remains unchallenged forever.

Financial power tends to follow capital, trade flows, and demand.

If physical gold continues to move toward Asia and Asian markets continue to gain influence, some of that power may gradually move with it.

This is not only about the metal itself. It is also about storage, settlement, liquidity, and the institutions that support the entire system.

For the first time in many years, another significant center is emerging in the region where the majority of new physical gold demand is being created.

If this trend continues, it may not only be gold that shifts eastward. Trading activity, liquidity, and market influence could follow as well.

And What About COMEX?

COMEX plays a critical role in gold price discovery today.

However, most futures contracts never result in actual delivery of physical metal.

As a result, the price watched by the entire world is largely formed in a market where financial contracts, rather than physical gold, dominate trading activity.

But what happens if the importance of centers focused more heavily on physical metal and real delivery continues to grow?

In that case, the question of how much gold is actually available could become increasingly important, rather than simply how many contracts can be created.

This is precisely why every development that strengthens the physical market deserves attention.

And if the center of the physical market truly shifts eastward, it may become increasingly difficult for price discovery to remain concentrated exclusively in the West.

Financial centers maintain their dominance only as long as they face no serious competition.

Why Timing Matters

What interests me most about this development is its timing.

Central banks have been increasing their gold reserves at a pace not seen in decades.

Many countries are moving their reserves closer to home or searching for alternative storage locations.

Asia continues to account for a growing share of global physical gold demand.

And it is precisely at this moment that new infrastructure for trading, settlement, and storage is being established.

Perhaps this is not merely a new gold trading system.

Perhaps we are witnessing another step in the gradual shift of physical gold, liquidity, and influence away from traditional Western centers and toward Asia.

If this trend continues, it may represent not just a change in geography, but a change in the very center of the global gold market.

Although this development primarily concerns gold, silver investors should not ignore it.

Changes in the gold market often influence the entire precious metals sector.

If markets that are more closely tied to physical metal and real delivery gain greater importance in the future, this trend could eventually extend to silver as well.

The market is already demonstrating that physical metal and paper prices do not always move in perfect alignment.

Higher premiums for physical silver in China are a reminder that real demand can, in some regions, be significantly stronger than prices on Western exchanges might suggest.

Today, this may appear to be little more than a technical development.

A few years from now, however, it may be viewed as an important milestone in the transformation of the global precious metals market.

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