A key warning sign for silver's recent price surge is the lack of accompanying investment inflows into Exchange-Traded Funds (ETFs). Unlike previous rallies, this one is not being driven by broad investor participation, which suggests the rally may be fragile and due for a correction.
Despite heightened U.S.-Iran tensions, oil prices show only a minor risk premium (~$2). The market believes an oversupplied global market, coupled with a U.S. preference for surgical strikes that avoid energy infrastructure, will prevent a major supply disruption.
The U.S. government's decision to pursue negotiations instead of immediate tariffs on critical minerals is a less disruptive outcome than feared. This could trigger a flow of silver inventory, previously moved to the U.S. for hedging, back to London, potentially cooling the recent price rally driven by tight London markets.
Global natural gas markets are currently disconnected. Extreme cold in Europe is driving prices up nearly 30% and draining historically low storage. Simultaneously, moderate weather in the U.S. and warmer conditions in Asia are keeping prices there subdued, showcasing how localized weather can override global supply trends.