"Silver prices recently broke $83 per oz. before an artificially induced pullback due to COMEX changing its margin requirement rules. The price of silver, driven by escalated demand vs. limited supply, should continue to rise going into 2026. At the time of this writing, silver is up over +154% YTD, vs. 17.5% for the S&P 500."
"However, while the mining sector may attempt to increase production, raw silver ore is still unusable without refiners to process the ore into the various configurations needed for its various applications in electronics, medicines, computer components, solar panels, etc. Similar to the oil industry, in which refinery capacity can determine gasoline prices in the market more than crude oil production levels, silver refineries' capacity. Therefore, stocks with silver refinery and processing operations should be in a catbird's seat going into 2026."
"Perhaps in response to the rapid jump in silver and gold prices since October's backwardation in London, the COMEX raised their margin requirements on December 26th. Soon afterwards, silver, which had broken the $83 per oz. price for a new high, fell back down into the low $70s range. While margin calls invariably caused the forced liquidation to a certain degree, some analysts were convinced that this was a favor to a number of the large banks, like Deutsche Bank and UBS, which still have significantly large short positions that they have been unable to unload."
Silver experienced a sharp price surge, topping $83 per ounce and gaining over 154% year-to-date, outpacing the S&P 500. A COMEX increase in margin requirements caused a temporary pullback, partly driven by forced liquidations and the impact on large banks holding significant short positions. Physical demand for silver exceeds available supply, and mined ore requires refinery processing to become usable across electronics, medicine, computing, and solar applications. Refinery capacity, rather than raw production alone, can constrain market availability. Equity exposure to companies with silver refining and processing operations is positioned to capture value as demand persists into 2026.
Read at 24/7 Wall St.
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