The Pressure Point
Authored by GoldFix;
Silver prices in London now trade above futures prices in both Shanghai and New York.
The gap signals a shortage of deliverable metal in the West’s key hub. Both China and the United States have metal available, yet neither has chosen to sell into London’s premium.
“There is demand for London metal, and there is little supply to provide for it.”
The imbalance has become a visible measure of how unevenly global inventories are distributed.
Shanghai: The Quiet Decision
China’s Shanghai Gold Exchange could help relieve London’s shortage by sending metal westward. It has not.
Producers and refiners appear willing to wait for stronger bids or prefer to retain silver for domestic needs.
“They may think London will pay an even higher price.”
The decision may be commercial, but it also aligns with a broader pattern of China prioritizing internal stability and strategic reserve building.
The U.S. ETF Link
In the United States, silver demand continues through ETF investment. Every new SLV share must be backed by physical metal. Historically, much of that metal came from London.
“The relationship between London’s physical market and the U.S. SLV is very deep.”
Custodians and traders often operate across both centers. As U.S. ETF demand expands, available metal in London declines. The old circulation loop between the Comex and London has begun to thin.
London: The Empty Hub
For decades, London’s primary role was to refine, remelt, and redistribute silver worldwide. Nearly every bar traded on Comex or in Shanghai passed through a European vault or refinery. That system depended on steady inflows.
“All roads lead to London forever. Until now.”
London’s free-floating inventory — the portion available for immediate delivery — has fallen to historically low levels. Spot prices now exceed futures, reflecting tightness in physical supply rather than speculative exuberance.
The Mechanics of a Squeeze
When one market trades at a premium, arbitrage should correct it. But transfers of metal into London remain slow.
Holders in the U.S. and China appear to be waiting for better prices or simply prefer to keep their silver close.
“The score is being run up on London right now.”
Individual banks and traders face short-term stress, yet the deeper challenge lies in how global metal logistics have fractured. London’s financial role depends on smooth circulation, and circulation is breaking down.
Credibility at Risk
Even if shipments resume and prices settle, London’s reputation as the central benchmark for silver is now in question. Its daily fix, once treated as a neutral global reference, increasingly reflects a regional scarcity.
“London’s ability and status as a global accounting mechanism has been damaged, potentially irreparably.”
The precedent of the 2022 nickel event still weighs on the market. Confidence in any pricing center can erode quickly once trust is lost.
Regional Markets, Fractured World
The move away from globalization is now visible in commodity pricing.
As trade flows fragment, metals no longer share uniform prices worldwide. Each region begins to price according to its own access and priorities.
“When global commodities become regional in pricing, it destroys the supply chains of those commodities.”
The LBMA’s position between New York and Shanghai grows more difficult. Metal and market activity follow the flow of trade, not legacy institutions..
From Critical to Conflict Minerals
The silver story fits within a larger global shift.
Governments are accumulating metals for industrial policy, energy security, and financial protection. The modern term “critical minerals” is, in many ways, a polite version of what they have always been — contested resources.
“We are in a global metals war. Critical minerals are really conflict minerals.”
Copper, lithium, rhodium, and gold all share this dynamic. Control of supply is now a form of economic power.
Bottom Line: Structure Beneath the Price
Prices fluctuate daily, but the structure beneath them is what matters.
London once stood as the center of a fluid, global system. It now sits between two blocs ( one in Asia, one in the Americas) both increasingly self-contained.
“All they’re doing is leaving London and taking the metal with them, literally and metaphorically.”
The squeeze on London reflects a market dislocation symptom of a deeper problem.
It represents the new reality of trade flows divided on regional lines and the slow retreat of shared global supply manifesting in frayed global supply chains. Fragmentation of markets due to decentralization of demand has come to metals
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