Shortages hit London too. The silver market is broken.
Sold Out in India, Panic in London
Bloomberg comments How the Silver Market Broke
Key Takeaways
- Vipin Raina’s company, India’s largest precious metals refinery, ran out of silver stock for the first time in its history due to high demand from Indian customers.
- The shortages in India were soon felt globally, with the London silver market also running out of available metal, and traders describing a market that was “all but broken”.
- The silver market crisis was caused by a combination of factors, including a multi-year solar power boom, a rush to ship metal to the US to beat possible tariffs, and a sudden spike in demand from India, particularly during the Diwali holiday season.
For months, Vipin Raina had been bracing for a stampede of buying from Indian customers loading up on silver to honor the Hindu goddess of wealth.
But when it came, he was still blown away. At the start of last week, his company, India’s largest precious metals refinery, ran out of silver stock for the first time in its history.
“Most people who are dealing silver and silver coins, they’re literally out of stock because silver is not there,” said Raina, who is head of trading at MMTC-Pamp India Pvt. “This kind of crazy market — where people are buying at these levels — I have not seen in my 27-year career.”
Within days, the shortages were being felt not just in India, but around the world. India’s festival buyers were joined by international investors and hedge funds piling into precious metals as a bet on the fragility of the US dollar — or simply to follow the market’s irrepressible surge higher.
By the end of last week, the frenzy had rippled across to the London silver market, where global prices are set and where the world’s biggest banks buy and sell in huge quantities. Now, it had run out of available metal. Traders describe a market that was all but broken, where even large banks stepped back from quoting prices as they fielded repeated calls from clients yelling down the line in frustration and exhaustion.
This account of how the silver market broke is based on conversations with more than two dozen traders, bankers, refiners, investors and other market participants, many of whom spoke on condition of anonymity as they weren’t authorized to speak publicly.
100-to-1 Ratio
When traders and analysts try to pinpoint the immediate cause of the silver crisis of 2025, they inevitably point to India.
During the Diwali holiday season, hundreds of millions of devotees buy billions of rupees worth of jewelry to celebrate the goddess Lakshmi. Asia’s refineries usually meet this demand, which typically favors gold. But this year, many Indians turned to a different precious metal: silver.
The pivot wasn’t random. For months, India’s social media stars promoted the idea that after gold’s record rally, silver was next to soar. The hype began in April, when investment banker and content creator Sarthak Ahuja told his nearly 3 million followers that silver’s 100-to-1 price ratio to gold made it the obvious buy this year. His video went viral during Akshaya Tritiya, an auspicious day for buying gold — second only to the Dhanteras festival on Oct. 18.
The premiums for silver in India above global prices, usually no more than about a few cents an ounce, started to rise above $0.50, and then above $1, as supplies ran short.
And just as Indian demand was soaring, China — a key source of supply — closed for a week-long holiday. So bullion dealers turned to London.
They soon discovered that the city’s precious metals vaults were largely sold out. While London vaults underpinning the global market hold more than $36 billion in silver, the majority of it was owned by investors in exchange-traded funds.
Demand for silver ETFs has soared in recent months, amid concerns about the stability of the US dollar, a wave of investment that’s become known as the “debasement trade.” Since the start of 2025, ETF investors have hoovered up more than 100 million ounces of silver, according to data compiled by Bloomberg — leaving a dwindling stockpile available to supply the sudden boom in Indian demand.
Premiums soared above $5 an ounce, well beyond the normal spread of a few cents. “I have been here in this company for the last 28 years and I have never seen these kind of premiums,” said M.D. Overseas’s Mittal.
Panic in London
Traders described a growing panic as liquidity dried up. The cost of borrowing silver overnight soared to annualized rates of as high as 200%, according to consultancy Metals Focus. As the big banks that dominate the London market started to step back from the silver market, bid-ask spreads became so wide as to make trading near impossible.
In another sign of the disarray in the market, one trader said the big banks were offering such wildly different quotes that he was able to buy from one bank at its ask price and simultaneously sell to another at its bid for an immediate profit – a rare sign of dysfunction in such a large and competitive market.
For the past five years, silver demand has outstripped silver supply from mines and recycled metal — in large part thanks to a boom in the solar industry, which uses silver in its photovoltaic cells. Since 2021, demand has outstripped supply by a total of 678 million ounces, according to the Silver Institute, with photovoltaic demand more than doubling over the period. That compares to total inventories in London of around 1.1 billion ounces at the start of 2021.
The stress in the silver market has been building since the start of the year, as fears that silver would be ensnared by President Donald Trump’s reciprocal tariffs prompted traders to attempt to front-run any possible levies by shipping more than 200 million ounces of metal into New York warehouses.
On top of the tariff drawdowns, more than 100 million ounces of silver flowed into global ETFs in the year through September, as a wave of investment demand for precious metals supercharged a rally that helped drive gold through $4,000 an ounce for the first time in history.
Together, the two trends drained London’s reserves, leaving dangerously little metal available to underpin the roughly 250 million ounces of silver that change hands in the London market every day. Based on Metals Focus estimates, by early October the “free float” of metal not owned by ETFs in the London silver market had dropped to less than 150 million ounces.
Silver Falls More Than 6% as Precious Metals Retreat After Rally
Also note Silver Falls More Than 6% as Precious Metals Retreat After Rally
- Silver fell more than 6% in its biggest drop in six months as the broad precious metals group retreated following a furious rally this week.
- Concerns eased over credit quality in the US and trade frictions between China and the US, which is denting haven demand for gold and silver.
- A historic squeeze in the silver market in London is also showing signs of easing, prompting some profit-taking by investors.
I see little reason to believe we have seen the end of this rally. There is no fiscal discipline anywhere.
Despite soaring deficits and inflation well above target, the Fed is cutting rates anyway.
Related Posts
October 17, 2025: Flying Nearly Blind, Fed Almost Guaranteed to Cut Interest Rate this Month
Look for a quarter-point cut even though the BLS will post the CPI ahead of the meeting.
October 18, 2025: Zero Progress on the Reducing the Deficit Despite Tariff Revenue
For fiscal year 2025, the deficit is $1.8 trillion, similar to 2024.
Looking ahead, don’t forget to tack on Obamacare subsides because there will be a deal. Also factor in Trump’s “Golden Dome Defense Shield for America”.
And who the hell knows what Trump is going to get us into in Venezuela, Afghanistan, or Gaza.
Finally, none of these long-term budget projections factor in a recession, ever.
So, if you believe a $1.8 trillion deficit is likely as good as it gets for a while, you are thinking correctly.
October 17, 2025: U.S. Masses 10,000 Troops Near Venezuela, a Top Admiral Resigns
Are we going to invade? “We are certainly looking at land now,” said Trump.
October 16, 2025: Gold Surges $100 to New Record High Above $4,300 as Bond Yields Dive
Gold reiterates its message: Spending is out of control with no faith in the Fed.
Do you have faith in the Congress or Trump to address the deficit? Faith in the Fed?
Neither do I. And neither do gold or silver.
the spread between gold and silver prices got so wide that either gold needed to retreat or the price of silver go up,
that has a consequence
market price acted accordingly
according to von mises, the value of either commodity did not change, only the price
price is simply a component of the value equation and values are personal not collective
it’s when when enough individuals feel the same way, the price changes
supply and demand are the consequence not the cause, so is the price
Well all metals are getting hit big time. Lost all the positive earnings so the manipulation continues. 🤬
I guess buy more lol 😂
So Gold has fallen from roughly $4,350 on October 20’th, to roughly $4,050 as of October 22’nd. So it’s down roughly $300 in 2 Days. Last time gold was under $4,000 was October 9’th, but it’s been under $4,000 every single day since October 7’th, which shows how quickly a little bit of “Profit Taking” can alter the price of Gold.
Now keep in mind, this was a blip in the radar, and reflects Only Profit Takers that wanted to sell, or more likely Had to sell. Far more reasons for the latter to continue to occur as we reach the end of the year.
Now the scary part for Fold Bugs. This was one of the largest drops in over a decade. That piece of information will awaken the Investors of Gold (Holders, as they can). This is where and when the price reflections take off to the downside. The Holders want to take their Profits too, but at the Peak. Well a longer than a decade drop, will make them start thinking about that Peak, and whether or not it’s here. We will ALL Know when the Peak is here, as the sell signal will be in full gear, and literally like overnight, it will seem or be, the Price of Gold will have tumbled severely.
My guess, is after a year long run up, profit takers will not be greedy as they have it ALL right in front of them, right now. My guess is that they will take it and run with it. Say goodbye to the high price of Gold, and the sooner the better to take what profits you can now, before they are long gone IMHO!!!
Long ago when gold was soaring I thought about adding silver to my investment portfolio. The problem is where to keep the damned stuff. I don’t trust paper silver as much as I don’t trust paper gold.
I would guess the price of Silver will go up. Unlike Gold as an investment, Silver relays more on usage. With the rush on for Technological Advances, I believe Silver could play a more vital role in these advances. As they say, We will soon see…
Silver holds despite Comex and China rushing the PM to LBMA.
I hope The London Whales choke on their paper shorts.
They are pretty good at what they do… He says grudgingly…
Although the price of gold has gotten out of its suppression range recently.
Parabolic up can equal parabolic down.
On Fridays close, the December futures PAPER GOLD contracts at the COMEX represented 37,028,700 million ounces of physical gold. They do not have anywhere close to that amount available for delivery. They never do! Most contracts settle for cash, cold hard US dollars.
What is changing that has made gold go up so much? DEBASEMENT!!!
People do not trust their Central Banks to manage the value of their currency! Just as Mish discussed. They want tangible assets! But it is not only the US that has its citizens reaching for tangible assets to hold while their paper depreciates. It is happening worldwide. India and London are literally panicking to find silver as buyers stand for delivery.
Central Banks of the world can no longer trust the US and its dollar…
Central Banks are shifting portions of their dollar reserves into gold, many are also printing their own currencies to buy Physical gold.
The compelling question that needs to be answered is: When will the holders of paper gold contracts at the COMEX “Stand For Delivery” in numbers that exhaust the physical inventory? That is the day when the process of price discovery on the COMEX becomes immediate, tangible and is viewed real time as traders scramble for deliverable physical gold.
The game of “Fractional Ownership” or “Re-Hypothecation” (or whatever the hell the COMEX calls their paper contract price suppression scheme) comes to in inflection point.
“Stand For Delivery” The most feared words on the COMEX.
“Cold Hard US Dollars”
OK Soft squishy US dollars.
😉
The worldwide fiat money scam is unraveling.
And the huge Global and US Debt.
All the gold ever mined would fit in 3.5 Olympic sized swimming pools. Most just sits around in a vault or dresser drawer, so hardly essential. Fun fact, during World War II, the 500 metric tons of gold that Germany ran through the Swiss to secure hard currency to do business with so called neutral neutered countries would fit in a 9x9x9 foot cube. This is not much bigger than a box you could build with 12 pieces of plywood. Nobody would accept gold directly, only hard currency, and only the Swiss accepted the idea that it was reserves from the German Central bank. Of course gold has been plundered for centuries for different causes. Personally I don’t touch the stuff. You never know who’s dental filling, or lootings from which conquestador you are holding.
Greater probability of breathing the same air as Julius Caesar.
Hey Mish,
I hope all is well with you. I’m still posting over at ZeroHedge. Cheers and Aloha,
Bag of Pigs
Thanks
Doing well – Feel free to chime in here
I inherited a small trove of silver eagles that have been sitting in my closet for a decade or so. Any advice on how to sell them at the highest possible price?
How to sell at the highest possible price?
WAIT!
best prices are had when dealing with someone directly. no middlemen. ask your family and friends who they know likes metals.
We have had great experiences with Old, Trusting, Jewelry Stores. My wife has been taking older jewelry she never wears and having it exchanged for credit/cash for newly designed pieces she can wear now.
Our Store designs the new piece with Her, and gives Us current market prices for it. We use the credit towards the new piece and take any cash left over.
= India’s largest precious metals refinery, ran out of silver
some kind of BULL11SHIT.
why company called =refinery=?? what does it do? was not supposed called silver/ gold dealer ?
so what company buys ? pure silver, silver ore? some old silver plates and forks ??
======
and second. from practical standpoint!
lets you run company and having some kind of inventory of anything!
time by time you buy inventory on market to re-sell later.
======
so for now, you see you cant obtain inventory- gold, silver, oil , ipads, etc!
WHAT DO YOU DO? obv, you jack up prices on your own inventory to crush demand for now!!
otherwise if you sold everything, YOU CANT BUY ANYTHING to refine, so you must close company, or what all your employees would do ?
i call BS!
Or maybe there really is a supply shortage, relative to increasing demand?
I suspect we are seeing the global economy self-destructing. As usual, the low hanging fruit goes first, while attention shifts to ‘safety assets.’
Did baby, Dig!
Gold up $150 today to $4363. One ounce of gold will buy 42,195 $Melania meme coins.
we will see if gold can break 4400 for now.
if not, we have corr on hand.. 10*15 pct
Make that 43,326 $Melania coins as gold went even higher and $Melania went even lower (no surprise there).
Don’t you go into bitcoin. It’s worse than fiat currencies. Not only it’s man made (intrinsically worthless); doesn’t have an objective value (what are unallocated electrons swimming in somebody else’s computer worth?); it’s not even backed or regulated by a government (my God!).
Gold, silver and platinum all the way.
Sell all stocks including Tech AND miners.
Get out NOW!
tech has v. strong momentum
as long people believe in this BS of AI, stocks are up.
top 10 stocks, half of market.
Imagine what’ll happen when they start having doubts at the same time with over $1 trillion in margin debt? You will wait until then?
LMAO. Why would you get out of ‘miners’ if it is ‘gold, silver, platinum all the way?
About $2k of every gold ounce mined is profit for miners,
Because 1) their profits are contingent on low fuel costs (transitory circumstances); 2) they can be nationalized if gold goes much higher; 3) natural disasters, fraud, political turmoil, seizure by warlords – take your pick; and 4) last but not least: those morons are selling real money (gold and silver) for fake, unlawful and fraudulent “money” aka as FRNs and all the other currencies of central banks that hold US “dollars” as reserves.
Also, don’t forget the old adage that went something like: A mine is a hole in the ground with a thief on top.
Gold is down today (big attack by western banks and Wall Street of Zion). Let me see how they’re doing.
If the stock market is allowed to swoon, they’ll slaughter those things.
Maybe we’re seeing FOFOA coming around after all, with the paper shenanigans over the past two + decades coming to a head?
Gold is under stress too. When I look at the Apmex gold inventory, they are sold out of a lot of items. Delivery dates range from 2 weeks and up. Might not mean anything, because I have seen that situation before. But it is an indicator.
my gold under matters is doing just fine!
play silly games on exchange , win silly prizes.
The COMEX has issues with a lack of inventory of gold for the December contract.
Expect more volatility in the gold and silver markets.
Inflation is being masked by an oil supply glut. Money flows, the volume and velocity of money have been surging:
07/1/2024 3.3
08/1/2024 8.1
09/1/2024 10.3
10/1/2024 12.0
11/1/2024 12.6
12/1/2024 21.3
01/1/2025 21.3
02/1/2025 16.8
03/1/2025 25.9
04/1/2025 27.8
05/1/2025 28.6
06/1/2025 31.4
07/1/2025 33.1
08/2/2025 35.4
“I see little reason to believe we have seen the end of this rally.”
Since I trade options, I always check the “forecast” using the options market. SLV doesn’t have a positive net credit collar like GLD does but I keep waiting as SLV is far cheaper than GLD.
The SLV January 2027 $47.50 puts have a value of 7.43 while the calls have a value of 7.48 as of when I’m writing this comment.
In contrast GLD January 2027 atm puts have a value of 29.97 and calls have a value of 43.55 which results in a relative risk-free return of 8.62% from now thru January 2027 assuming gold hits 4300 or above in Jan 2027. I already have GLD positions and don’t want to overload my portfolio with it which is why I’m watching SLV.
India does not make the list of the largest miners:
Mexico: The largest producer, with over 202 million ounces in 2024.
China: Ranked second, with 109.3 million ounces in 2024.
Peru: A close third, producing 107.1 million ounces in 2024.
Poland: Produced 42.5 million ounces in 2024.
Russia: Produced 39.8 million ounces in 2024.
Bolivia: Produced 42.6 million ounces in 2024.
Chile: Produced 52 million ounces in 2024, with a significant increase in recent years.
Australia: Produced 34.4 million ounces in 2024.
United States: Produced 32 million ounces in 2024.
it is question who sells/ export on market most?
in russia it is all controlled. you cant just walk in and buy amount
it is not investable yet.
Totally irrelevant about India not being a major silver producer. In the same way that it’s totally irrelevant that the US is not among the world’s largest coffee bean growers. What counts is demand by Indian silver buyers and American coffee drinkers.
As a stacker I’m smiling. Likely will be a pull back in prices but to a level that is still high and then next year a new high. Same with gold. If gold makes $10,000 (or higher) as fiat keeps being dumped then silver will pass $100.
India is one of the largest markets for Silver, of late beating Gold.In India Silver is mostly a byproduct of Zinc manufacture. Hindustan Zinc share price has risen. in proportion.
India must be right up there as one of the largest Buyers of both? They cherish the stuff in a religious sort of way.
There is a 45-year long cup-and-handle formation on the long term silver chart that has just begun to resolve.
Get ready for $200/oz. silver within the next 6-12 months.
Nah, US$1000, maybe US$2000.
Depends upon the speculators and excess US$ still slopping around.
If you are being serious (which I doubt), that would imply a gold price of somewhere in the neighborhood of $40,000 per oz.
Pretty please, can that happen?
It may happen, but if it does, expect to pay $25 for a Big Mac.
When I start hearing these crazy projections, then I start thinking we are near the top.
What prices would those be for The Magnificent Seven stocks?
$200 silver (never mind Lisa Hookers $1000 silver) will break a LOT of industries.
Other than jewelry, gold is essentially just stored somewhere (vaults, homes etc). But silver is incredibly important (and present) in a lot of real world products. The price for those items rising would cause some major inflation.
$200 silver adjusted for inflation would still not be anywhere near the 1980 price peak.
The amount of silver per electronic device is tiny. So if silver goes up tenfold and your phone has a dimes worth then now it will add a buck to the cost.
Of course it depends on the device. The cruise missiles that rained down on Baghdad during the first gulf war had 500 ounces each and a one gigawatt solar panel farm requires around 500,000 ounces of silver. Maybe if silver goes sky high it will make war too expensive and also end the green scam?
They’ll never take my Kodachome away!
Same answer as above.
Dig baby, Dig/1
The Economy is broken.
It’s been broken since August 15, 1971. Everything since that day has been a paper illusion.
the hiccup since 1971 is the aberration. the world is going back to a gold and silver money regime. the russians pegged the ruble to the oil priced in gold already.
I don’t think there is enough gold to go around. Could elaborate on that arrangement because it looks pretty good on paper?
Nixon was forced to disconnect the dollar from gold by the markets. There weren’t enough dollars to go around if it was gold linked. Paul Volcker had the courage to tame the resulting traumatic inflation. I believe that event demonstrates in todays context that gold is not an alternative currency by itself.
The Economy itself is real and functioning. Otherwise you wouldn’t be able to buy or sell anything and nothing would get made etc.
What’s broken is fiat money underpinned by out of control government spending in every country.
no. it is just debt based economy