Silver rally strains global supply as retail demand surges across Asia

Silver’s rapid price surge is rippling through global markets, straining supply chains and forcing banks and refiners to scramble to meet unprecedented retail demand.

After climbing almost 150% last year, the white metal has accelerated further in early 2026, jumping by roughly a third in just a few weeks.

The rally has been fueled by geopolitical uncertainty under the Trump administration, renewed attacks on the Federal Reserve, and a growing perception among consumers that precious metals offer one of the few remaining safe havens.

Retail frenzy spreads beyond China

China was an early epicenter of the silver buying spree, with consumers snapping up coins and small bars as prices broke records.

That enthusiasm is now spreading across Asia and the Middle East.

From queues in Singapore to sold-out offers in South Korea, retail investors are driving demand at levels rarely seen before.

“It’s the highest demand I’ve ever seen,” said Firat Sekerci, the general manager of Public Gold DMCC, a bullion dealer based in Dubai in a Bloomberg report.

“Most refineries in Turkey have been out of stock for the smaller bars — 10 ounces, 100 ounces — for the past 10 days.”

In Turkey, retail buyers are reportedly willing to pay as much as $9 an ounce above global benchmark prices in London to secure metal.

Elevated premiums are also evident across the Middle East, highlighting how localized shortages are pushing prices well beyond international references.

Supply bottlenecks and global dislocations

The surge in premiums is prompting global banks to prioritize shipments to markets such as Turkey and the Middle East, according to dealers familiar with the matter.

As a result, less silver is reaching India, leaving demand there unmet.

India remains one of the world’s largest silver consumers, and demand is now even stronger than during the October squeeze that disrupted global markets.

At that time, Diwali-related buying and US tariff fears drained liquidity in London and sent benchmark prices to their highest levels since the 1970s.

Investor appetite in India has intensified again, particularly for coins and smaller bars.

“Whatever we manufacture, we sell. We could supply 25% more coins and bars, and the market would absorb it,” said Samit Guha, the chief executive officer of MMTC-PAMP India Pvt.

While the company has more than doubled its silver dore imports between October and December from last year, it is still struggling to keep pace.

It is also receiving requests to refine metal for customers in South Korea, the United Arab Emirates, Vietnam, and Malaysia.

Tight inventories and resilient demand

Structural factors are worsening the shortage.

Refiners typically focus on producing large 1,000-ounce bars used in wholesale markets, limiting the availability of retail-friendly formats.

“It doesn’t make sense for refiners to ramp up production and invest in new lines” for smaller bars, said Sunil Kashyap, managing director of bullion trader FinMet Pte Ltd., citing uncertainty over how long demand will last.

Meanwhile, inventories remain thin following last year’s squeeze.

Stockpiles linked to the Shanghai Futures Exchange briefly recovered in December but have since fallen back to post-October lows. Old bars with varying purities are now re-entering circulation, underscoring the strain.

Despite high prices, demand appears resilient. “Most retail silver purchases are made fully in cash rather than on margin, so even if prices pull back, many will simply hold on or even use dips to add to positions,” said Zijie Wu, an analyst from Jinrui Futures Co.

With geopolitical and economic risks mounting, analysts say the persistence of retail buying will be a key factor in determining whether silver’s rally has further room to run.

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