Silver is experiencing a phase in which headlines and price movements overshadow much of what investors actually feel in their daily lives: whether metal is available, under what conditions it is delivered, and how "physical" an investment ultimately really is. This is precisely where the silver fallacy lies. Scarcity does not only arise where the spot price ticks in real-time, but where goods must be moved, allocated, and delivered.
Currently, silver acts as a magnifying glass for two forces that are rarely so strong simultaneously: the need for security and industrial hunger. Reuters recently reported on new record highs for gold and silver, citing geopolitical uncertainty and interest rate expectations as drivers. At the same time, spot displays on major precious metal platforms show silver prices around the 100 US dollar per ounce mark, underscoring the momentum of the movement.
But even if the price rises, that is not yet the decisive point. What matters is whether price and physical reality move in lockstep. And that is frequently not the case.
In the major trading centers, silver is moved in magnitudes that hardly fit intuitively with the physical world. A look at London illustrates this: the LBMA reported an average daily transferred silver volume of 213.3 million ounces for November 2025. This is not mine production, but settlement and booking volume in the market – essentially "movement" within the system.
For comparison, a full-year perspective helps: The Silver Institute estimated total silver demand for 2024 at 1.16 billion ounces, with industrial demand reaching a record level of 680.5 million ounces. At the same time, the Silver Institute reported a structural deficit of 148.9 million ounces for 2024 – meaning demand exceeded supply.
This relationship is the core of the problem: a market can appear extremely liquid even though it is physically tight. This is because liquidity in paper trading does not replace bars in delivery.
| Metric | Current/Last Reported Value | Context for “Price vs. Availability” |
|---|---|---|
| Silver Spot (Indication) | approx. 101 USD/oz (As of display) | Spot can rise sharply without more metal becoming immediately deliverable. |
| London (LBMA) Silver Clearing, Daily Average | 213.3 million oz (Nov 2025) | High “paper” movement can mask physical tightness. |
| Global Silver Demand | 1.16 billion oz (2024) | Annual demand as a benchmark for real sector sizes. |
| Industrial Silver Demand | 680.5 million oz (2024) | Industry binds silver structurally, independent of investor sentiment. |
| Market Deficit | 148.9 million oz (2024) | Deficits increase the relevance of inventories, recycling, and logistics. |
When scarcity arises, the spot price is often the last place where it becomes “clearly” visible. Spot is a snapshot, shaped by trade flows, expectations, hedging, and macro-narratives. The supply chain, on the other hand, is relentless: refineries, bar formats, transport, insurance, customs, storage capacities, and the question of whether inventories are truly freely available.
In phases of high demand, this typically manifests in three signals: first, in longer delivery times for certain products and denominations; second, in higher premiums over spot; third, in a wider spread between “immediately available” and “orderable.” These are not spectacular stock market curves, but they are often the decisive reality check for investors.
The sharp price increase recently reported by Reuters is an example of how quickly expectations can cluster in prices. In such phases, narrative explanations become more dominant: geopolitical risks, currency issues, interest rate policy. All of this may be true – and yet the practical question remains whether an investor ultimately receives metal or just a promise of metal.
That is exactly why it is worth consistently viewing silver from two perspectives: as a financial market price and as a physical good. Those who do not make this distinction confuse liquidity with availability.
Those who view silver as an allocation, a store of value, or a tangible asset component should not just look at the chart, but at the “mechanics” behind it. The silver fallacy begins where one assumes that the official price is automatically a gauge of the real supply situation. Often it is the other way around: only when supply chains and premiums visibly react does scarcity become tangible – and by then, it has usually been in the system for some time.
Stay farsighted
Yours, Helge Peter Ippensen
