Gold has firmly established itself in the low to mid-$5,000s, a level the market now appears to accept as the new normal. But while gold’s rise has been historic, the real story unfolding in precious metals is silver.
In recent sessions, spot silver has surged into the low $90s, briefly pushing above $91 per ounce during a powerful morning rally. This breakout is not occurring in isolation. It is coinciding with mounting stress in Western paper markets, accelerating industrial demand, regulatory shifts in Asia, and aggressive capital deployment into junior miners. Together, these forces suggest a structural repricing of silver may be underway.
Silver’s explosive price action came just as CME Group was forced to halt electronic trading in metals and natural gas due to a Globex technical failure. In a statement provided to Kitco News, CME confirmed that trading was halted at 12:15 p.m., with natural gas reopening at 12:50 CT and metals at 1:45 CT. All-day orders and GTDs with that date were canceled, while acknowledged GTCs remained in effect. The disruption occurred just ahead of first notice day for March silver, as prices were testing multi-decade highs.
While the exchange attributed the halt to technical causes, billionaire investor and Sprott Inc. founder Eric Sprott sees deeper stress in the system. In an interview with Kitco News Senior Anchor Jeremy Szafron ahead of the 2026 PDAC convention in Toronto, Sprott stated there is “no doubt there’s a physical short squeeze going on.”
He emphasized that inventories across major exchanges can be tracked and are falling. He pointed specifically to the Shanghai Gold Exchange, noting that inventories there recently fell by roughly 10 percent to about 11 million ounces, a figure he described as almost negligible for a country the size of China.
Sprott also estimates that there remains a roughly 500 million-ounce short position in silver on Comex, with banks rather than miners largely holding the positions, he believes. If physical supply continues to tighten, reconciling those paper obligations with deliverable metal could become increasingly challenging.
Peter Schiff, CEO of Euro Pacific Asset Management, raised similar concerns about the timing of the trading halt, suggesting that if deeper liquidity problems exist, labeling them as technical issues may help prevent further price escalation during already volatile conditions.
Beyond the mechanics of Western exchanges, the most consequential development may be the geographic shift in price discovery.
On February 26, India’s Securities and Exchange Board enacted sweeping reforms that allow actively managed equity funds to allocate up to 35 percent of their assets to gold and silver instruments. This change opens a $385 billion actively managed equity pool to exposure to precious metals.
Beginning April 1, 2026, Indian mutual funds will value physical gold and silver using domestically published spot prices from recognized local exchanges rather than relying on the London Bullion Market Association benchmark. This move represents a formal decoupling from Western pricing standards and signals an intention to develop independent domestic price discovery mechanisms.
These regulatory shifts align with Sprott’s view that pricing power is gradually migrating eastward. As capital flows increasingly through Mumbai and Shanghai instead of London and New York, the dominance of Western paper markets could diminish. Even modest allocations from large institutional pools could place further strain on already tightening physical supply.
Unlike previous silver bull markets driven primarily by speculative flows, today’s rally is reinforced by structural industrial demand. Industrial fabrication now accounts for nearly 60 percent of global silver consumption, reaching approximately 680 million ounces in 2024. Solar photovoltaic installations, electric vehicle production, and artificial intelligence server manufacturing are significant contributors.
Global EV production is forecast to reach 14 to 15 million units in 2026, potentially adding 70 to 75 million ounces of incremental silver demand. Battery electric vehicles require substantially more silver than internal combustion vehicles, while AI training servers require significantly more silver-coated components than traditional cloud hardware.
These trends create a durable baseline of consumption that did not exist at the same scale during prior cycles. Direct corporate procurement is also emerging as a theme. Sprott highlighted reports of industrial buyers securing future production and advancing funding to guarantee supply behavior that often signals tightening market conditions.
The gold-to-silver ratio remains central to many bullish theses. Historically, during periods of monetary stress, silver has traded at a 15-to-1 ratio relative to gold. Although geological mining ratios are closer to 8-to-1, market pricing has diverged widely from those levels for decades. Sprott maintains that a reversion toward 15-to-1 is plausible, with an overshoot to 10-to-1 possible in a momentum-driven environment. With gold trading in the low to mid-$5,000s, a 15-to-1 ratio would imply silver above $300 per ounce.
While such projections remain debated, they illustrate the magnitude of potential repricing if physical constraints and monetary demand converge.
Capital is already flowing aggressively into mining equities, particularly juniors. Sprott has expanded his stake in Hycroft Mining, increasing his ownership to the low 40s. He has also deployed millions into other silver-focused companies, expressing confidence that the sector has significantly underperformed the underlying metals and may be poised for catch-up performance.
He compares the setup to the late 1990s technology boom, when a concentrated rush into a favored sector drove valuations sharply higher. Major producers are generating substantial free cash flow at elevated prices. Consolidation activity across the sector suggests merger and acquisition momentum is building, particularly as large companies seek to replace declining production profiles.
Overlaying these developments is a broader macroeconomic backdrop defined by fiscal expansion and currency concerns. Peter Schiff has argued that proposed tax reductions combined with ongoing entitlement obligations create structural budgetary pressures that could eventually require monetary accommodation. In that scenario, precious metals may continue to benefit as investors seek protection against currency debasement.
Gold at $5,000 has become normalized far faster than many anticipated. Silver at $90 may represent a similar inflection point rather than an endpoint. Falling exchange inventories, rising industrial consumption, Eastern regulatory reforms, and growing institutional allocation all point to a market undergoing structural change. Whether silver ultimately reaches $150, $200, or $300 remains uncertain. What is increasingly clear, however, is that the balance between paper claims and physical metal is shifting and that shift may redefine global precious metals pricing for years to come.