Silver Post-Smash Outlook

Summary

Alasdair Macleod analyzes the aftermath of a recent sharp drop in silver derivatives, noting that hedge fund long positions are near a 20‑year low while physical liquidity in COMEX and London vaults is extremely thin. He warns that a massive short position in Shanghai, which may need to be covered or physically delivered, could trigger a violent bear squeeze as central banks and sovereign wealth funds continue to hoard gold and silver, further draining available supply. The piece highlights the risk of a forced liquidation cascade and the broader market strain caused by the mismatch between derivative exposure and actual metal inventories.