Welcome back, GoldBuzzers!

I think the real story this week isn't the price action. It's what's happening underneath it. COMEX silver vaults are draining at an unsustainable rate, Shanghai premiums are running above 12%, and the sixth straight year of deficit is grinding through remaining stockpiles. I dig into all of it below.

Ok, Let's start with the market numbers.👇

Gold held firm just under $4,800 on Wednesday, its highest level in a month. Mediators say both sides in the US-Iran talks have agreed to keep negotiating, and a second round is reportedly being scheduled, even as the US continues its Hormuz blockade and sends 10,000 more troops to the region. Crude oil dipped below $90 on the diplomatic optimism and the dollar sank to a six-week low, both giving bullion a lift. Gold is still about 10% below where it was before the Iran conflict erupted, but the big bank year-end targets haven't budged: Goldman at $5,400, JPMorgan and Wells Fargo at $6,300, UBP at $6,000.

Silver traded above $79 after surging more than 5% on Tuesday, its best level since March. The gold-to-silver ratio compressed to around 60, a sign silver is outperforming on a relative basis. The structural deficit keeps tightening. The Silver Institute and Metals Focus have now flagged a sixth consecutive year of shortfall, with an estimated 762 million ounces drawn from above-ground stocks since 2021. That is not a number that corrects itself quietly. Silver is facing short-term resistance and traders are watching the $80 level as the gateway to a potential push toward $90.

Silver hit $121.67 in January. Then it dropped 35%. Now it's clawing back around $80.

If you've been checking prices every few hours this week, you're not alone. The last three months have been a rollercoaster for silver holders. But while the correction shook out plenty of weak hands, it hasn't touched the physical market. Not even close.

Let's start with the numbers that matter most.

COMEX registered silver - the metal actually available for delivery against futures contracts - sits at roughly 76.8 million ounces as of mid-April.

Open interest? 575.5 million ounces. That puts the delivery coverage ratio at 13.4%. For every ounce of silver that could actually be delivered, there are 7.5 ounces of paper claims sitting on top of it.

That's stress territory.

Last year, 474 million ounces were delivered through COMEX - double the year before. March 2026 brought more than 46 million ounces demanded in a single month. And the withdrawals keep coming. Multiple sessions in April have seen 1.8 to 3.15 million ounces pulled from eligible vaults in a single day. On the other side, fresh inflows are barely registering. Some days it's 5,000 ounces. That's a rounding error on a spreadsheet.

The metal is leaving. And it's not coming back.

Meanwhile, after accounting for tax, Shanghai is typically paying a 12-13% premium over spot. Silver is trading above $90 locally as Chinese importers pull record volumes to feed industrial and investment demand.

China's silver imports in early 2026 hit their highest level in eight years. When two of the world's largest futures markets are pulling metal in different directions, something has to give.

This brings us to the supply picture. The Silver Institute's latest outlook projects a sixth consecutive annual deficit - roughly 67 million ounces short of demand in 2026. Bloomberg's new annual survey has a different number (46.3 million ounces), so the exact figure depends on the source. Either way, the market hasn't been in surplus since 2020.

On the demand side, solar panels, EVs, AI data centres, and electronics keep consuming more silver every year. Physical investment demand for bars and coins is forecast to jump 20% to 227 million ounces - a three-year high. On the supply side, the world's largest primary silver producer, Fresnillo, cut its 2026 output guidance by 9% back in January. Mine supply simply isn't growing fast enough.

The gold-silver ratio tells the story from a different angle. It's sitting around 60 right now, down from above 100 earlier in this cycle. When the ratio compresses like this, it's silver playing catch-up in a precious metals bull market. Gold is knocking on $4,800. Silver has room to run.

Not everything is bullish, obviously. The 35% correction from January's high happened for real reasons. CME raised margin requirements. The Fed held rates and revised its dot plot to just one cut. The Iran conflict pushed oil higher and strengthened the dollar. Leveraged longs got liquidated hard. Scrap supply is rising as $80 silver makes recycling more profitable. And if the global economy slows sharply, industrial demand takes a hit.

But the physical market keeps tightening. Analysts at Reuters project an $79.50 average for 2026. Bank of America has targets stretching to $135-$309. Citi is at $150-$170. J.P. Morgan says $81 average. These are not fringe voices.

I’ve been travelling recently and haven’t had a chance to catch up with Andrew Sleigh at Sprott Money, but I’m hoping to do that before Sunday’s newsletter, to find out what he’s been seeing at the dealer level.

Meanwhile, the correction has been painful but it hasn't changed anything underneath. Six years of deficits have seriously drained above-ground stocks. COMEX vaults are bleeding ounces. And the industrial demand story - solar, EVs, AI - isn't slowing down. In fact, it’s speeding up.

As we wait for the current consolidation to play out, it's worth reminding ourselves that gold and silver will go dramatically higher over the coming years as the global financial system deteriorates and confidence in sovereign debt crumbles.

That’s all for this Thursday, folks. I’ll see you on Sunday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com