Here's a brief update on the silver market, following the last bulletin.

The rush for physical silver continues in New York: between March 11 and 25, 2025, the COMEX recorded a net inflow of 1,033 tons, or over 33 million ounces. Some days were marked by massive inflows, with 160 tons received on March 13 and 131 tons on March 19, testifying to a major restocking movement. By comparison, withdrawals remained moderate, with only 176 tons over the period, reflecting a coordinated effort to strengthen reserves. Combined stocks (registered + eligible) rose by 926 tons, from 13,490 to 14,416 tons. This increase seems to reflect growing pressure on the physical market or the imminence of important delivery deadlines.

The rapid accumulation of physical silver in this month of March 2025 is strongly reminiscent of mid-2020, when the COMEX had already experienced a sharp rise in inventories to meet increased demand for physical delivery, against a backdrop of post-COVID tensions and fears of delivery defaults. By July 2020, inventories had been rapidly replenished, notably via massive imports and ETF conversions (such as SLV), in order to avert a crisis in the precious metals market, which was under severe pressure at the time. As in 2025, the aim of this increase was to stabilize a fragile market, avoid a physical short squeeze and manage abnormally high open interest as maturity approached. The main difference lies in the context: in 2020, it was a defensive post-crisis reaction, whereas in 2025, the initiative seems more preventive, even anticipatory, suggesting that market players have learned the lessons of the previous crisis.

Although the COMEX's recent restocking - with over 1,033 tons of silver added between March 11 and March 25, 2025, equivalent to over 33 million ounces - seems more than sufficient to cover the 856 contracts still open on the March contract (equivalent to 4.3 million ounces, according to the latest March 26 data), the situation remains delicate. It all depends on how much is actually registered, i.e. available for immediate delivery, as much of the inventory is simply eligible (stored, but not committed). What's more, if holders of these contracts actually demand physical delivery - an increasingly marked trend in a market where confidence in paper settlements is eroding - even a large reserve could come under pressure. The COMEX seems to have anticipated this risk by massively replenishing its stocks, demonstrating a desire to avoid a similar scenario to 2020. But the real test will come in the final days of the trade, when a choice has to be made between rolling over positions, cash settlement or actual delivery. The risk is therefore more systemic than arithmetic: it represents a real test of confidence in the solidity of the physical silver futures market.

To increase pressure on the physical market, a call to buy silver has been made for March 31, in the spirit of the first Silver Short Squeeze. For the time being, however, this initiative seems to have had a much more muted impact on the retail side, with mobilization far less marked than during the initial movement.

 

 

But the call to buy physical silver on a massive scale, from today until March 31, could take on an unexpected dimension - especially if tension on the physical market continues to rise between now and then. In just four days, the appeal has already been seen by 250,000 people on X, and it's estimated that this number will quickly rise to over a million by the weekend. The community created for the event boasts 2,000 members after just two days.

The Silver Short Squeeze 2, if it takes place, will undoubtedly be very different from the first. This time, physical demand would come not just from the retail sector, but also from much larger entities.

In China, institutional demand for physical gold enters a new phase.

March 25, 2025 marks a real turning point: China Life Insurance has become the first Chinese insurance company to place a physical gold transaction on the Shanghai Gold Exchange. This is the realization of a project long in the making: to give insurance funds in China access to the physical gold market - and perhaps soon to the silver market, too.

China Life is the first of ten major insurance companies authorized to participate in the gold market, four of which have already joined the Shanghai Gold Exchange as members.

This first operation is part of a pilot program launched by the Chinese financial regulator, and China Life has not done things half-heartedly: dedicated teams, internal processes, information systems, risk control, flow organization... everything has been put in place to pave the way for this new allocation class.

 

 

Chinese insurance funds are getting into physical gold - and soon silver. It's a real game changer for precious metals.

Will this rush into physical gold be enough to trigger a short squeeze?

Short positions in SLV and PSLV are reaching record levels, and bullion banks are also posting massive shorts in futures contracts. While seeking to contain the price of silver, bullion banks have accumulated a massive net short position of 44,583 futures contracts, equivalent to 223 million ounces of silver, more than a quarter of the world's annual production.

In 2020, the short squeeze had been avoided in extremis: delivery requests had been honored in the very last hours, via cash settlements or last-minute physical deliveries.

But at the end of March 2025, the situation could change.

The physical market is already under pressure, and if delivery requests remain strong, a real supply problem could force short sellers to hedge on the market - propelling the silver price to new heights.

Suspense.

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The information contained in this article is for information purposes only and does not constitute investment advice or a recommendation to buy or sell.

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