Insights 
VT 
Silver prices reached over $53 per ounce, marking a 120% increase since the year’s start. This surge was propelled by supply concerns, reflective of broader trends in metal markets.
Physical metal demand from India has heightened fears of supply bottlenecks, notably in the London market. Lease rates have risen sharply, indicating liquidity issues, while declining COMEX inventories may show outflows to London.
This morning’s price correction suggests market overheating. However, continued Gold price rallies might support Silver prices, attracting those seeking more affordable alternatives since Silver remains cheaper than Gold.
We saw real momentum in silver earlier this year, pushing prices to a record high of over $53 per ounce before a necessary correction occurred. That sharp increase was driven by supply worries, a theme that continues to dominate the market narrative. These concerns seem justified as physical demand remains robust, particularly out of Asia.
Reports on physical demand from India remain strong, with third-quarter imports for 2025 showing a significant 25% increase compared to last year. We’ve also watched COMEX registered inventories fall by another 5 million ounces since September, pointing to ongoing outflows. One-month silver lease rates, though down from their peaks, are still elevated, which suggests borrowing physical metal remains difficult.
The correction we saw after the market overheated shows that volatility is high, making long-only positions risky without careful management. With gold prices testing new highs near $2,800, traders will likely continue to view silver as the more affordable precious metal. This suggests that call options or call spreads could be a way to gain upside exposure while managing the risk of sudden pullbacks.
For the coming weeks, a break above the recent $49 resistance level could signal the next leg up, targeting the $53 highs from earlier in 2025. The gold-silver ratio has compressed significantly this year but remains well above the historical lows seen in previous bull markets. If that ratio continues to fall towards the 45-50 range, it would imply significant outperformance by silver.
