The Disconnect in Silver Markets

The article argues that recent sharp weakness in silver prices is primarily a liquidity-driven event rather than a fundamental demand collapse. Short-term forced selling has exposed liquid, leveraged positions, pushing prices down, but underlying structural demand—especially industrial use in solar, EVs and electronics concentrated in Asia—remains intact while supply is increasingly inflexible and geopolitically constrained. Miners, exemplified by Silvercorp, remain resilient with low all-in sustaining costs, strong production and robust recent financials, highlighting that physical production continues despite price noise. Market implication: current price action may misprice the gap between transient liquidity stress and long-term fundamentals, suggesting the weakness could be a cyclical phase rather than a durable loss of demand.