Silver Market Analysis: Rally Resumes Amid Supply Surge and Vulnerability Concerns

This analysis is based on the Kitco News report [1] published on November 10, 2025, which reported that silver prices resumed their rally above $50 per ounce after holding critical support above $48/oz, while TD Securities warned that increased supply makes the market vulnerable to corrections. The rally follows silver’s official addition to the U.S. Geological Survey 2025 List of Critical Minerals, potentially boosting industrial demand, but comes as London vault inventories dramatically increased from approximately 87 million to 198 million ounces in just two weeks [1].

• SLV ETF Price
  : $48.12 (+1.67, +3.60%) as of November 12, 2025 [0]
• 52-Week Range
  : $26.19 - $49.25 [0]
• Recent Performance
  : SLV gained 8.90% over the past 14 trading days, rising from $44.08 to $48.01 [0]

The silver market has experienced extreme volatility, reaching a record high of $54.48/oz last month when physical demand depleted above-ground stocks in London [1]. The current rally back above $50/oz demonstrates market resilience, with silver holding key support levels around $48/oz [1].

The most significant market development has been the dramatic inventory replenishment in London Bullion Market Association (LBMA) vaults. According to TD Securities, approximately 198 million ounces are now available—representing an “epic 111 million ounces added to the free float only ~2 weeks after the historic #silversqueeze” [1].

This supply surge originated from multiple sources:

• Metal flowing from New York and China markets
• Increased recycling activity (estimated at ~30% of monthly inventory replenishment)
• Release from private vaults [1]

LBMA data confirms that silver holdings in London vaults reached 26,255 tonnes at the end of October 2025, a 6.8% increase from the previous month [2]. This effectively ended the immediate physical shortage that drove prices to record highs, though TD Securities notes that overall market conditions remain structurally tight [1].

The silver market continues to exhibit a disconnect between paper and physical markets, with the recent squeeze highlighting vulnerabilities in the supply chain [3]. Key technical indicators show:

• Strong support above $48/oz level [1]
• Recent rally back above $50/oz [1]
• SLV ETF approaching its 52-week high of $49.25 [0]

However, the increased supply creates potential for price volatility and corrections, particularly as lease rates have fallen from record highs of 34.9% to 5.6% [3], indicating easing physical market tensions.

Silver’s addition to the USGS 2025 List of Critical Minerals represents a fundamental shift in market fundamentals. This designation could boost industrial consumption and disrupt global supply chains [1], providing long-term structural support despite short-term supply fluctuations.

The rapid inventory replenishment demonstrates how quickly silver supply dynamics can shift. The market moved from severe physical shortage to substantial surplus within weeks, highlighting the market’s vulnerability to rapid supply changes from recycling, private vault releases, and cross-regional metal flows [1].

The supply surge involved coordinated flows from New York and Chinese markets, indicating strong interconnections between major precious metals trading centers. This suggests that future supply disruptions in one region could be partially offset by flows from others, but also that policy changes (such as export controls) could have amplified global impacts [1].

1. Supply Volatility
   : The recent dramatic inventory increase demonstrates how quickly supply dynamics can shift, potentially leading to sharp price corrections [1]. The market’s vulnerability to supply changes creates elevated short-term risk.

2. Policy and Regulatory Risks
   : Potential Section 232 tariffs or Chinese export controls could dramatically alter supply flows and pricing dynamics [1]. Such policy changes could rapidly reverse the current supply surplus.

3. Market Structure Vulnerabilities
   : The disconnect between paper and physical markets creates potential for continued volatility and squeeze scenarios [3]. Lease rate movements and regional price differentials should be monitored closely.

1. Industrial Demand Growth
   : The critical minerals designation provides a catalyst for increased industrial consumption, potentially creating sustained demand growth [1].

2. Structural Market Deficit
   : Despite short-term supply increases, the fundamental structural deficit in the silver market remains intact, providing long-term support [1][2].

3. Technical Support Levels
   : Silver’s ability to hold above $48/oz support indicates underlying market strength [1], suggesting potential for further upside if supply constraints re-emerge.

Decision-makers should closely track:

• LBMA Inventory Reports
  : Monthly data for trends in London vault holdings [2]
• Industrial Demand Metrics
  : Specific data on critical minerals-related consumption growth
• Regional Price Differentials
  : Spreads between London, New York, and Shanghai markets
• Recycling Activity
  : Sustainability of scrap metal contributions to supply
• Policy Developments
  : Any announcements regarding tariffs or export controls

The silver market is experiencing a complex transition phase characterized by resurgent price momentum amid rapidly evolving supply dynamics. While the critical minerals designation and industrial demand growth provide fundamental support, the dramatic inventory replenishment has created short-term vulnerability to corrections. The SLV ETF’s strong performance (8.90% gain over 14 days) [0] reflects this bullish sentiment, but the market’s ability to sustain current levels will depend on the balance between industrial demand growth and supply flexibility from recycling and cross-regional flows.

Market participants should recognize that while short-term volatility may persist due to supply fluctuations, the long-term structural deficit in silver remains intact. The critical minerals designation and growing industrial applications provide fundamental support, but timing and magnitude of these impacts require careful monitoring of inventory data, policy developments, and industrial demand metrics [1][2].