Silver’s Eight-Year Supply Crunch: What Precious Metal Investors Need to Know Right Now

 

Gold faces headwinds while silver enters a record supply deficit—here’s what it means for your portfolio. 

The Big Picture 

Precious metals markets are never boring, but the past week served up an unusually complex mix of signals for investors. Gold pulled back from a multi-week rally, palladium led declines among platinum-group metals, and silver quietly continued building what may be its most compelling long-term investment case in years. 

Whether you’re looking to buy gold as a safe-haven asset or build a position in silver, understanding the forces at play right now is essential for Canadian investors. 

 

Gold Under Pressure — But Don’t Write It Off 

Gold had a rough week, shedding around 1.34% even as the Middle East conflict intensified—a dynamic that frustrated many investors expecting the metal to rally on geopolitical fears. 

What’s Weighing on Gold Prices 

Factor	Impact	Result
10-Year Treasury Yield	+14 basis points	Stronger dollar pressure
Fed Rate Hold Probability	43% → 69% in one week	Reduced gold appeal
Energy Prices	Rising	Higher inflation expectations
ETF Flows	Significant outflows	Forced liquidation

Instead of rallying on geopolitical fears, the gold price outlook was weighed down by a 14-basis-point jump in the 10-year U.S. Treasury yield, which pushed the dollar higher and reduced the appeal of non-yielding bullion. 

Rising energy prices—a direct consequence of the regional conflict—fed into inflation expectations, which in turn raised the likelihood that the Federal Reserve will hold rates unchanged. When rates stay high, gold loses one of its most reliable tailwinds. 

Understanding Crowded Trade Risk 

The SPDR Gold ETF’s options skew reveals important positioning dynamics: 

• Call-to-Put Ratio: Nearly 2:1 calls outnumbering puts 

• Implication: Many investors positioned for rally that hasn’t materialized 

• Risk: Lopsided positioning can amplify downside moves when sentiment shifts 

“Gold positioning shows calls outnumbering puts nearly 2-to-1, yet the metal has lost ground since the conflict began—a classic crowded-trade risk that every bullion investor should watch closely.” 

Gold’s Fundamentals Remain Intact 

Still, gold’s fundamentals haven’t changed overnight. Global central bank demand remains structurally robust. 

 

Turkey’s Gold Holdings: 

• Gold reserves climbed to over $750 billion 

• Nearly half the size of the entire Turkish economy 

• Turkish households grew $300 billion wealthier from gold holdings last year 

• Cultural preference for physical gold ownership drives demand 

Strong Corporate Performance Signals 

On the corporate side, K92 Mining posted a strong quarter, beating earnings estimates with $0.36 EPS versus consensus of $0.33. Key highlights include: 

• New processing plant commissioned under budget in December 

• Already surpassing feasibility study projections 

• 2026 production guidance: 190,000 to 225,000 ounces gold-equivalent 

That kind of operational momentum from a mid-tier producer reinforces confidence in the broader gold mining sector’s ability to generate returns even in volatile pricing environments. 

Silver Investing: Eight Years of Deficits and Still Counting 

If gold is the headline metal, silver may be the real story for long-term investors right now. The market is entering its eighth consecutive year of physical supply deficit—meaning annual industrial and investment demand has exceeded mine supply every year since 2017. 

The Structural Supply Crisis 

Year Range	Supply Status	Cumulative Impact
2017-2024	Consecutive deficits	Eight straight years
Global Inventories	All-time lows	Cushion disappearing
Industrial Demand	Growing	Solar, EV, electronics
Mine Supply	Constrained	Long development timelines

Global silver inventories have fallen to all-time lows. While exact figures shift quarterly, the consistent trend is unmistakable: the cushion that once absorbed demand spikes is disappearing. 

When inventories are thin, even modest demand surges—whether from solar panel manufacturers, electric vehicle producers, or retail investors—can produce outsized price moves. Silver’s dual identity as both an industrial commodity and a monetary metal makes it uniquely sensitive to economic cycles. 

The Gold-to-Silver Ratio Compression 

Analysts at RBC Capital Markets project the gold-to-silver ratio to compress toward the 60-65x range over the coming years. This creates compelling upside potential. 

 

Current Market Dynamics: 

Metric	Current Level	Analyst Projection	Implication
Silver Spot Price	~$90/oz	N/A	Current market
Producer Equity Pricing	Implied $122/oz	Long-term average	36% upside implied
Gold-to-Silver Ratio	60-65x target	From current levels	Ratio compression likely

At the time of writing, spot silver was trading around $90 per ounce. Royalty and streaming equity analysts have already priced in covered silver producers at an average long-term silver price of approximately $122 per ounce. 

Understanding the Pricing Gap 

That gap between spot and implied pricing is significant. When sophisticated equity analysts—who spend their careers stress-testing assumptions—price silver producers at $122 while spot sits at $90, it suggests one of two scenarios: 

1. The equities are overvalued (less likely) 

1. The physical metal has significant room to run (more likely) 

History suggests the latter tends to win out when supply deficits are structural rather than cyclical. Supply crunches tend to matter more in silver than in gold due to silver’s extensive industrial applications. 

Corporate Activity Signals Confidence 

Recent M&A Developments: 

• Discovery Silver Corp. acquired Glencore Canada’s 100% interest in the Kidd operations in Timmins, Ontario 

• SSR Mining selling troubled Çöpler mine stake for $1.5 billion 

• Capital unlocked equivalent to more than 25% of market capitalization 

• Corporate repositioning signals new growth phase 

Corporate repositioning of this scale tends to precede new phases of growth for acquirers. The M&A appetite in the silver space reflects industry confidence in long-term fundamentals. 

Safe-Haven Assets in a World of Competing Risks 

The past week exposed a tension that precious metals investors face regularly: geopolitical fear and financial fear don’t always point in the same direction. 

Understanding Competing Risk Factors 

Risk Type	Current Direction	Impact on Precious Metals
Geopolitical	Elevated (Middle East)	Typically bullish
Currency (USD)	Strengthening	Bearish headwind
Interest Rates	Higher/staying elevated	Bearish headwind
Inflation	Rising expectations	Mixed impact

The Middle East conflict drove risk-off sentiment broadly—but the result was a stronger dollar and higher yields, both of which are headwinds for safe-haven assets like gold and silver. 

Central Bank Policy Volatility 

Poland’s situation adds another dimension. The country was the world’s largest central bank gold buyer in 2025, but reports that National Bank Governor Glapiński proposed revaluing reserves to generate up to $13 billion for defense spending rattled markets briefly. 

The plan involves accounting revaluation rather than physical sales—but the headline alone reminded investors that central bank policies can introduce short-term volatility into what are otherwise structural demand trends. 

Platinum Group Metals Under Pressure 

Weekly Performance: 

Metal	Weekly Change	Key Development
Palladium	-2.19%	Worst performer
Platinum	Negative	Also under pressure
Both	New contracts	Moscow Exchange mini-futures

The Moscow Exchange’s launch of mini-futures contracts on both metals—90% smaller than standard contracts—could increase speculative participation. PGM derivatives demand nearly doubled year-over-year in February. 

More retail-accessible contracts cut both ways: they can amplify rallies and deepen selloffs. 

The Key Takeaway 

For long-term bullion investors, the key takeaway isn’t that gold failed as a safe haven this week—it’s that the nature of the risk mattered more than the risk itself. Currency risk, inflation risk, and rate risk are currently dominating geopolitical risk in the metals market. 

That balance can shift quickly, and when it does, those holding physical positions tend to benefit most. 

Positioning for What Comes Next 

Markets rarely reward investors who wait for certainty. The confluence of several factors creates a compelling case for building or adding to a physical bullion position now—before the next macro catalyst forces prices higher. 

Why Now? 

Key Investment Thesis Points: 

• Silver’s Structural Supply Deficit: Eighth consecutive year with no quick fix 

• Gold’s Central Bank Demand: Still robust despite short-term volatility 

• Compressed Valuations: Precious metals attractive relative to equity alternatives 

• Pricing Disconnects: Silver equity pricing implies 36% upside from current spot 

• Corporate Confidence: Active M&A signals industry optimism 

Physical Ownership Advantages 

Benefit	Physical Bullion	Paper Alternatives
Counterparty Risk	None	Present
Delivery Certainty	Guaranteed	Variable
Portfolio Volatility	Lower	Higher
Crisis Performance	Proven	Dependent

At CanAm Bullion, we make it straightforward to buy gold and silver in physical form—from coins and rounds to larger bars—with transparent pricing and secure delivery. 

Whether you’re new to precious metals or looking to rebalance an existing position, we help Canadian investors navigate the options with confidence. 

Take Action on Silver’s Supply Opportunity 

The eight-year supply deficit isn’t a temporary phenomenon—it’s a structural imbalance that creates compelling long-term value. Combined with gold’s fundamentals remaining intact despite short-term pressure, the precious metals opportunity has rarely been clearer. 

We offer transparent pricing on physical gold and silver bullion, expert guidance on portfolio allocation, secure delivery across Canada, and ongoing market analysis to inform your decisions. 

 

Ready to build your precious metals position? Visit canambullion.ca or call us at 1-877-513-9399 to explore our gold and silver inventory and discuss your investment strategy with our specialists. 

Don’t wait for certainty—by then, the opportunity may have passed. 

 

 

References 

[1] Intellinews — Turkey’s gold reserves exceed $750 billion — https://www.intellinews.com 

[2] K92 Mining Q4 2025 Financial Results — https://www.k92mining.com/news 

[3] RBC Capital Markets — Silver Market Outlook — https://www.rbccm.com 

[4] Moscow Exchange — PGM Mini-Futures Launch — https://www.moex.com/en/ 

[5] SSR Mining — Çöpler Mine Sale Announcement — https://www.ssrmining.com/news 

[6] Discovery Silver Corp — Kidd Operations Acquisition — https://discoverysilver.com/news 

[7] Silver Institute — World Silver Survey (Annual Supply/Demand Data) — https://www.silverinstitute.org/world-silver-survey/ 

[8] SPDR Gold Shares ETF Options Data — State Street Global Advisors — https://www.spdrgoldshares.com