The silver market is experiencing a historic de-coupling, with physical silver trading at significant premiums over the official paper spot price. Silver has surpassed its 1980 record and is reaching highs of $80, $90, $100. This surge is driven by industrial demand for AI data centers, electric vehicles, and solar panels. China’s tightened export licenses further impact supply.

Unlike the 1980 market cornering attempt by the Hunt brothers, today’s short sellers are facing challenges due to silver’s industrial importance and high demand. The market is experiencing deep backwardation, where spot prices exceed futures, indicating a strong need for the metal. China’s restrictions on export licenses are exacerbating the supply shortage.

Investors are advised to approach the silver market cautiously, as the parabolic move can be risky. The iShares Silver Trust ETF has been a popular choice, with some investors opting for out-of-the-money puts and calls. The gold-silver ratio has dropped significantly, potentially signaling a forthcoming correction. Margin requirements on COMEX could also impact future silver prices.

Read more at Barchart: Why the Current Silver Mania Is So Wild, and How I’m Playing It