Ladies and gentlemen, the silver market is currently experiencing a battle between supply and demand. This is not just price fluctuation but a concentrated outbreak of deep structural contradictions.

Let's first look at the current inventory situation. The global annual silver production is 27,000 tons, which seems substantial. But the key point is that the spot inventory available for immediate delivery at futures exchanges worldwide may total less than 20,000 tons. Meanwhile, the short positions sold on exchanges? They are more than 1.6 times this amount. In other words, the market’s promise to deliver silver far exceeds the actual deliverable inventory. This mismatch has become a ticking time bomb.

The data more intuitively illustrates the problem. The free circulation inventory in London and New York combined is only about 16,000 tons. During the same period, the open interest of silver futures contracts on the New York Mercantile Exchange corresponds to 25,800 tons of silver. The nearly 10,000-ton gap is like a hidden landmine beneath the market—when the delivery moment truly arrives, short sellers who cannot deliver will face unprecedented pressure.

What will happen in this situation? When a group of bullish investors simultaneously shout, "I want immediate spot delivery," the shorts who cannot deliver in the short term can only resolve the dilemma by pushing prices higher and closing at higher prices. The tighter the inventory, the greater the price increase. This is not speculation; it is an inevitable result of market imbalance.

This supply deficit-driven scenario has shifted from an implicit contradiction to an explicit pressure. Many market observers are warning that silver has entered a phase where prices are determined by supply-side factors, and traditional technical analysis may have to step aside.

Interestingly, this is not just a story about silver itself. Whenever precious metal supplies tighten, it often reflects deep concerns about monetary policy and inflation expectations. Silver’s inventory dilemma, to some extent, also mirrors market anxiety over global liquidity and asset revaluation.

So, what appears to be a calm commodity market is actually undercurrents of turbulence. Either shorts find ways to replenish inventories, or longs have the opportunity to reverse the situation through spot pressure. This inventory battle has only just begun.