Problems With Friday's Late Silver Price Smash
What The
This Substack has been tracking silver’s recent price surge driven by a global shortage of silver resulting in the premium in Shanghai for silver rising above 15% compared to Western cash/spot silver rates (priced even before a 13% VAT tax is applied on bar withdrawal from both SHFE and SGE exchanges in Shanghai). Indian exchanges have shown similar premia for physical silver.
Shanghai and the Chicago Mercantile Exchange (CME) COMEX vaults in New York have been relentlessly drawn-down of silver bar stock and Western mints have suspended production of most silver bullion products due to this global silver shortage.
The silver price smash witnessed on Friday January 30th got going after midnight Shanghai time (Saturday) and right after London Silver Market trading hours leaving the CME COMEX New York market as the dominant global price setting platform still open.
The global silver shortage suddenly disappeared late Friday as silver’s cash/spot price was drilled from an overnight high of ~ $104 /oz. down to ~ $74 /oz. (-29%) as the CME COMEX traded over 369,000 silver futures contracts (1.8 billion (B) oz.).
Problems With Friday’s Price Smash
Friday’s New York silver price smash while most silver markets were closed for the weekend is curious:
Nothing changed on Friday in the terms of silver metal supply to market reducing the global silver shortage that has driven silver’s price higher.
The open interest (total contracts) on the CME COMEX ended down just 5% on the day indicating that the trading on that day was just a churn with little covering or new positions despite the massive ~ 2x average daily volume traded on Friday.
The CME COMEX has ‘circuit breakers’ in the silver market that halt trading for a period if extreme price movements occur to allow for a more orderly market. What the CME COMEX calls dynamic circuit breakers automatically kick-in when the price of silver drops or rises by 10% on a rolling 1 hour basis. We can see in Figure 1. below that from ~ 12:30 to ~ 13:30 Eastern Time, the price of silver - both cash/spot and futures - ranged between $91 /oz. and $75 /oz., representing an 18% range, and yet the CME COMEX automatic circuit breakers were not activated nor announced by the CME. Yesterday, I wrote a letter to the CME asking why this exception to CME COMEX rules occurred and will report their response when received.
Figure 1 - Cash/Spot Silver Price January 29 to 30, 2026 - 15 Minute Intervals; source: TradingView.com
The CME also announced late Friday that after the wild trading of that day, they would be instituting a margin increase on silver futures from 11% to 15% on Monday February 1 2026 representing an increase of 35% in CME margin requirements that must be paid by silver traders.
This only serves to augment price volatility after Friday’s wild trading. Perhaps the decline of only 5% in silver contract open interest on Friday was less than hoped.
Risk Of Augmented Capital Flight
Gold and silver are already on the move higher globally due to investor concerns about currency debasement, in all currencies, and market instability.
The worst thing an exchange can do is openly apply one-way rules in order to try to manipulate price discovery. If you want to see capital flight to physical monetary assets that are no-one else’s liability, that would be an excellent way to augment the trend.
Either way, nothing changed on Friday affecting the ongoing global silver shortage. Only wild trading of digital CME futures contracts while other global markets were closed.
We’ll find out soon if the CME really is in shambles.
I will leave you with this video of the UK’s PM Keir Starmer arriving in China last Thursday January 29 - slouched shoulders and looking bewildered. Perhaps there are problems in, say, The City of London’s markets.
https://x.com/jenniferzeng97/status/2016908964366061900
Best regards,
David Jensen
People all over the world are scrambling to buy physical silver, line-ups outside of precious metals bullion shops everywhere you look.
Refineries are telling us that production order backlogs mean delays could mount into months for receiving shipments.
Silver mints across the western world into east Asia are posting press releases stating that production is being cut back and in some cases stopped (US Mint, Perth mint).
Yet we see the price of silver futures fall more than 33% at one point in the afternoon with NO circuit breakers tripping.
TOTAL CORRUPTION EVERYWHERE on the Crimex/Comex but TV/Youtube "experts" tell us it's inflation, dollar collapse or geo-politicial tensions and impending war or even nonsense like the Kevin Warsh FED Chair pick.
No wait, it's China, China, China.
Total effin' B.S.
This is fraud and corruption (wire fraud, securities, fraud, insider trading, RICO violations),
perpetrated by the usual suspects JPMorgan, Citigroup, HSBC, Goldman Sacs, Morgan Stanley and Bank of America.
You are the first analyst I’ve seen mention Starmer’s visit to China right before such an important PM market date. Add in the pseudo ‘falling out’ between UK/Europe and US/NATO over Greenland/Iran. Plus the LME had a slightly odd delay to trading on Friday morning. LBMA in trouble delivering contracts? Who knows, but very fishy all round.