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Silver is back at its all-time nominal high, while tales of shortages and squeezes abound. Is this the moment long-suffering stackers have been waiting for?

Let’s start with an AI-generated overview of the structural silver deficit:

A significant global shortage of silver is currently underway, driven by persistent demand outpacing supply. This deficit is the fifth consecutive year of imbalance, with the market expected to see a deficit of 117.6 million troy ounces in 2025, a 21% reduction from the previous year but still substantial. The shortage is attributed to robust industrial demand, particularly in electronics, electric vehicles, and solar panels, which has remained strong despite a slight decline in solar panel demand. Investment demand is also rising, with a projected 7% increase in demand for silver coins and bars in 2025.

The situation has led to severe market disruptions, particularly in regions like Ahmedabad, India, where bullion traders and jewellers have halted new silver orders and are experiencing a near standstill in the jewellery trade ahead of the Diwali festival. This is due to a sharp price spike, with silver reaching Rs 1.6 lakh per kg, and a critical shortage of physical silver, forcing traders to demand large premiums for spot delivery and extending delivery times to four to seven days. Similar shortages are reported globally, with inventories at mints, refiners, and dealers vanishing and raw materials for minting bars becoming scarce.

Experts predict that the structural deficit will continue for several more years, as supply growth lags behind demand, particularly in industrial applications. While the deficit is expected to narrow slightly in 2025 due to a 1% increase in supply and a 1% fall in demand, the underlying imbalance remains a significant factor supporting silver prices.

Here’s how this is playing out in India, the world’s largest silver importer:

India’s Kotak Mahindra halts new investments in silver ETF amid shortage

Oct 9 (Reuters) - Kotak Mahindra Asset Management Company (KMAMC) has temporarily suspended fresh lump-sum and switch-in investments into the Kotak Silver ETF Fund of Fund, effective October 10, 2025, the company said in a statement on Thursday.

This is primarily due to a shortage of physical silver in the domestic market that lifted premium sharply above benchmark prices, Kotak said.

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The statement added that silver is trading at a premium relative to international prices.

Spot silver hit a record high of $51.22 per ounce on Thursday, surpassing the $51 per ounce level for the first time.

In India, the world’s biggest silver consumer, silver premium over official domestic prices jumped as much as 10% on Thursday because of strong investment demand ahead of a key festival and limited supplies, bullion dealers said.

“Kotak Silver ETF is an open-ended Exchange Traded Fund replicating/tracking price of Silver, which reflects the domestic price of silver. Therefore, the premium in domestic silver prices directly impacts the valuation of the Scheme,” the company said.

Meanwhile, the rest of the world has the same problem:

Silver Shortage Hits the UK

(Jerusalem Post) - A growing storm is engulfing the global silver market. From the UK to Australia, and from Canada to Vietnam, reports are surfacing of silver coins, bars, and raw materials vanishing from dealers’ inventories - a squeeze reminiscent of the 2008 financial crisis.

According to Mike Maloney, founder of GoldSilver.com and a long-time analyst of the precious metals market, “This is not a drill. Silver is on its way to unobtanium.”

Shelves Are Empty Across Continents

Across multiple continents, investors and dealers are reporting a sudden, synchronized shortage. In South Africa, the Rand Refinery has officially announced it is “sold out.” In Canada, major retailers including Costco and even the Royal Canadian Mint have depleted their silver stock.

In the United Kingdom, leading bullion sites such as Gold.co.uk are showing the same warning banners: “Awaiting stock” and “Create stock alert.” One-kilogram silver coins - a staple for British investors - are completely unavailable, with customers asked to register for alerts when inventory returns.

“This is not isolated,” said one London dealer. “There are no 250-gram bars left, and allocations are being rationed. What we have now might be the last available batch for weeks.”

GoldCore’s Jan Skoyles is becoming my favorite precious metals educator. In the following videos, she does a great job of fleshing out the silver squeeze:
 

And here’s Miles Franklin’s Andy Schectman with the gory details of the (imminent?) metals exchange default:
 

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