Core Viewpoint - A structural squeeze is occurring in the silver market, potentially leading to significant price increases as the influence of derivatives diminishes [1][2]. Market Dynamics - The relationship between physical silver and derivatives has historically suppressed prices, but this may be changing, leading to increased buying pressure as investors move away from paper assets [2]. - Recent events, such as the COMEX blackout, highlighted a significant volume of stand-for-delivery orders, indicating a potential physical market shortage [3][4]. Physical Market Shortages - There are widespread physical shortages of silver, with COMEX delivery stands this year equivalent to approximately 12,500 tons of silver and 1,200 tons of gold, positioning COMEX as a major source of precious metals [6]. - Shanghai silver stocks have fallen below 600 tons, signaling a severe shortage in the market [6]. Supply Chain Changes - Starting January 1, China will ban the export of silver, removing a key supply source that has historically helped stabilize Western prices, which could lead to unrestrained price increases for silver [7]. ETF Skepticism - There is skepticism regarding exchange-traded funds (ETFs) like iShares Silver Trust, which are viewed as derivatives rather than actual metal, potentially complicating access to the physical market [8]. Market Drivers - Current market movements are primarily driven by industrial demand rather than investor speculation, although sustained price increases may eventually attract investor interest [9].