As Robert Gottlieb, an executive at JP Morgan Bullion Bank, bluntly put it: "There is basically no free-floating silver left." That declaration, coming from one of the most powerful insiders, has electrified the metals market.
Lease Rates Explode, Short Sellers Panic
Silver lease rates - the interest paid to borrow physical silver for delivery - have rocketed by 20% to 30%, far outpacing those of platinum. This is a rare signal of scarcity in an otherwise abundant market.A recent JPost analysis of the current silver squeeze explores how London's shortage is just a preview of what may come when the paper silver system begins to unravel.
Simultaneously, both gold and silver recently smashed through critical psychological levels, piercing the $4,000 and $50 thresholds, signaling powerful momentum, as detailed in JPost's report on gold and silver key levels.
Borrowing Silver Now Costs 12% - If You Can Find It
On the paper side, the iShares Silver Trust (SLV) is now seeing borrow fees near 12%, with no shares left to short. For those betting on downward price movement, the pain is intensifying - they're forced to pay steep borrowing fees while also incurring losses as prices climb.
This squeeze operates from both sides: rising prices erode short positions, while lack of availability and soaring borrow costs tighten the noose. A related JPost feature on ETF pressures and borrow costs shows how these dynamics are reshaping the market.
Vaults Drained, Physical Supply Shackled
Gottlieb's statement about "no free-floating silver" is no idle rhetoric. It reflects the reality that virtually all deliverable silver - the metal that could be transferred or leased - is tied up in ETFs, industrial contracts, and other long-term commitments. Little remains unencumbered.One JPost investigation into physical silver scarcity highlights how cross-border flows and deliveries are already being affected.
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Refineries Backed Up - The Hidden Choke Point
Even as raw silver (doré) flows to refineries, many refiners are backed up four weeks or more due to excessive volume. That delay has become a rate-limiting bottleneck.
In practice, there's silver in the ground, but not in usable form on the market. Unless refineries can catch up, supply cannot meet demand - especially as investors clamor to claim their metal.
Paper Market Cracks and Margin Shockwaves
On the futures side, the paper market is fracturing. After silver broke above its 1980 record high of $49.45, the CME Group swiftly raised margin requirements by 9.3% for silver contracts, triggering forced liquidations.
Though the market saw a sharp intraday drop, silver still closed above the prior day's price - a clear signal the uptrend remains intact. This pattern echoes technical setups - such as a shooting star - but in this environment, it may represent panic selling under duress, not genuine reversal.
45-Year Formation Reaches Its Climax
Technically, silver has now completed a 45-year "cup and handle" pattern, first drawn from the late 1970s. The breakout has broken the long-held resistance zone of ~$50. Some analysts now expect silver to reach triple-digit levels, even mid-triple digits, if momentum continues.
Meanwhile, the phenomenon of backwardation - where spot prices exceed futures - has surged into $1.12, confirming that participants want delivery now. JPost coverage of silver's historic movements provides further insight into the market's technical dynamics.
The Final Float Is Gone
When a JP Morgan vault executive declares there is "no free-floating silver left," it's more than bravado - it's confirmation.The free float refers to the physical silver available for transfer or sale. That supply is exhausted. What's left is locked in contracts, industrial use, or stored in ETFs - none of it available for trade.
Bottom Line:For years, critics have accused bullion banks and exchanges of suppressing silver prices via paper contracts and leverage. Ironically, that suppression may have delayed a natural move toward scarcity - but it couldn't prevent it forever.
Now, the reckoning is here:
The shorts are trapped.
Refineries are clogged.
Vaults are tapped out.
And perhaps most tellingly - as Robert Gottlieb put it - "There is no free-floating silver left."
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