Silver Hong Kong trading heats up! Global stockpile crisis triggers a new wave of buying rush

The silver market has recently been unusually hot. As of November 27, 2025, the spot silver price broke through $53.6 per ounce, rising for four consecutive trading days. Even more shocking is that the Shanghai Futures Exchange silver warehouse inventory dropped to a new low since 2015, and the Shanghai Gold Exchange inventory also hit a nine-year record low. This inventory crisis is causing waves in the global silver trading market, and as an important international trade hub, Hong Kong’s silver trading activity is also heating up.

Global Silver Migration: How the Arbitrage Wave Is Changing the Market Landscape

The most interesting phenomenon this year is a global “migration” of silver. Traders, aiming to position themselves before potential tariff policies are implemented, are transferring large amounts of silver from London to the NYMEX warehouses in New York, exploiting price differences for arbitrage. This move has directly led to a rapid decline in inventories on the London Metal Exchange, increasing the risk of short squeezes. To cope with this situation, the London Metal Exchange has even adjusted the lending rules for near-month contracts, implementing tiered premium controls on institutions holding large near-month positions.

The shortage of silver is also reflected in the spot market. The Shanghai Futures Exchange shows a clear structure of spot contango, with near-month contract prices continuously higher than forward contracts, indicating that short-term supply is truly tight. Lending costs in the London market remain high, further confirming the increasing difficulty of obtaining physical silver.

Technological Iteration and Demand Explosion: Silver Shifts from Supporting Role to Main Actor

The silver market is undergoing a fundamental transformation. The rapid evolution of the photovoltaic industry makes the story more complex—new battery types like TOPCon and HJT are replacing traditional P-type batteries, and this transition process involves a surge in silver usage per unit. Meanwhile, the widespread adoption of silicon carbide modules in electric vehicles has led to explosive growth in demand for high-conductivity silver paste.

These industrial changes mean that silver is no longer just a precious metal for hedging but has become an indispensable key industrial raw material. China’s tax reform has also contributed—by removing VAT rebates on some over-the-counter gold sales, traders in Shenzhen’s Shuibei market are shifting toward silver business, further tightening the spot market. The silver trading market in Hong Kong is also affected, with international buyers and local traders actively adjusting their portfolios.

Federal Reserve Rate Cut Expectations and Global De-dollarization: How Monetary Policy Turnarounds Are Boosting Silver

The Fed’s signals of rate cuts and the halt of balance sheet reduction have weakened the dollar trend, providing sustained positive momentum for safe-haven assets like silver. The global de-dollarization trend and the possible return to the gold standard are fermenting; both China and the US are beginning to include silver and other precious metals in strategic reserves and export controls.

The US Geological Survey has listed silver as a critical mineral, raising concerns about potential tariff measures. Analysts warn that if the US imposes tariffs on silver, inventories already shipped to the US could be locked in, potentially causing structural disruptions in the global supply chain. These expectations are prompting international silver traders to accelerate their deployment, and the silver trading volume in Hong Kong is also increasing significantly as a regional trading hub in Asia-Pacific.

Warning of Extreme Market Conditions: What Investors Need to Do

Silver prices have surged over 80% this year, with London spot prices briefly surpassing $54 per ounce in October. If inventories are not replenished in time, the market could replay the extreme conditions of March 2020—when COMEX silver futures experienced intense volatility and even triggered intervention by the exchanges.

The current situation is even more critical. London silver inventories have shrunk by about 75% from their 2019 peak, with only 200 million ounces freely circulating. This situation is highly prone to causing sharp price fluctuations. The most concerning is that China’s silver exports surged to over 660 tons in October, setting a record high. This large-scale outflow further depletes domestic inventories and weakens the market’s buffer capacity.

Regulatory authorities have already taken preventive measures. Since October 21, the Shanghai Futures Exchange has raised margin requirements and price limit ranges for silver futures to curb excessive speculation. Industry experts recommend building a protective network from multiple angles—improving delivery mechanisms, strengthening international coordination, developing diversified derivative products, and encouraging enterprises to establish strategic reserves.

For investors involved in silver trading, it is advised to strictly control risk exposure and cautiously respond to potential liquidity shocks. Keep a close eye on inventory changes, adjustments in delivery rules, and monetary policy directions of major economies, as these factors will jointly determine the future development of the silver market. Industry insiders expect that the shortage situation will take about two more months to gradually ease, and until then, volatility in the silver market will remain high.