Silver Shortage Signaled As Its Price Tips Into Backwardation

But Silver Is Not On The Tariff List !?

In 2025, the short tenor silver lease rate in London surged from near 0% to 6.5% , initially dropped to 3% after the Trump tariff announcement and is now starting to climb again. On April 10, 2025 the 1-month London silver lease rate stood at 3.8% according to Rob Gottlieb.

The shortage of silver can also be seen in silver’s price structure on the CME COMEX where the silver cash price is surging higher past the active month (May) traded futures price.

When the cash price surges higher than the futures price, this is termed ‘backwardation’ and is a signal that market participants increasingly want physical metal NOW and are willing to pay for it as opposed to waiting a few weeks.

In a word, shortage.

So much for the rush for silver delivery in 2025 being driven purely by fear that Trump would tariff silver bars delivered from London.

Figure 1 - Cash Silver Price Minus 2nd Futures Price (Currently May 2025); Source: GoldChartsRUs.com

The market shortage of silver can also be seen in Figure 2 below in the snap-back in the cash silver price from the initial silver tariff exclusion panic sell-off down to $28 /oz. to now back above $32 /oz. over the past 6 trading days.

Figure 2 - Cash Silver Price Bounce Back To $32 /oz.; Source: TradingView.com

We have signals from both the London and New York silver markets that there is an increasing shortage of physical silver available for delivery.

Best regards,

David Jensen