January 15, 2026 | How China Is Controlling the Silver Market

To most investors,  silver might seem like just a shiny metal for jewelry or coins. But in early 2026, something unusual is happening: the price of physical silver (the real metal you can hold) is moving higher than paper silver prices on big exchanges like COMEX in New York. This could create opportunities for investors. Here’s what’s going on, explained simply.

1. Physical Silver Is More Expensive Than Paper Silver

• On COMEX, silver trades around $92 per ounce.
• In Shanghai, China – where a lot of real silver is bought – the spot price (what people pay right now for actual silver) is close to $100 per ounce.
• Normally, traders would buy cheap in New York and sell high in Shanghai. That’s called arbitrage, and it usually closes price gaps quickly. But this gap has lasted weeks, showing a real shortage of physical silver.

Why the difference? COMEX prices are mostly futures contracts – agreements to buy or sell silver later. They’re easy to trade but don’t always reflect the real-world supply. Right now, getting actual silver fast costs extra.

2. China Controls Most of the Silver Refining

• Silver comes from mines around the world, like Mexico and Peru.
• China handles 60–70% of the world’s refining, turning raw silver into usable metal.
• Starting January 1, 2026, China limited exports. Only 44 companies can send silver abroad through 2027, and priority goes to China’s own factories.

The effect:

• Less silver reaches the US and Europe.
• Factories that need silver immediately must pay more, pushing physical prices higher.

3. Why Factories Can’t Wait
   Silver isn’t just for investors – it’s essential for modern technology:

• Solar panels: Silver conducts electricity. Green energy growth drives demand.
• Electronics & data centers: Phones, computers, and AI servers rely on silver wiring.
• Electric vehicles (EVs): EVs use up to twice as much silver as regular cars.

These industries can’t delay purchases, so they pay higher prices. This “inelastic demand” keeps silver costs high even when prices rise.

4. What This Means for Investors

• Real prices now matter more than COMEX futures.
• The gap shows physical shortages, not hype.
• Strong demand from factories + limited supply could fuel a long-term bull market.

Investing options include:

• Silver ETFs (easy way to invest in silver prices)
• Physical coins or bars
• Silver mining stocks

5. A New Era for Silver Prices

• The old system focused on paper trades.
• Now, physical demand drives prices.
• If US and European stockpiles shrink while China limits exports, buyers outside China may pay Shanghai-level prices.

Martin Straith January 15th, 2026

Posted In: The Trend Letter

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