Silver Market Update

Spot Prices Stabilize Slightly-Physical Premiums Widen Further

This is not financial advice. The precious metal markets are extremely volatile and investors should consult with their own investment advisors.

After we reported on the great silver crash of last week-that resulted in a 37% one day decline, we told everyone to keep their eyes on the opening of the Asia commodity market.

This is our analysis:

Silver's volatile ride persists into midday February 2, with spot prices recovering modestly from intraday lows near $73 per ounce but still down overall amid lingering liquidation pressures. Following the 37% crash on January 30 detailed in our early February report, the metal has extended losses, trading around $79.50-$80.50 per ounce—off about 7% from Friday's close but up from session lows. This partial rebound reflects dip-buying from physical investors, yet the gap between paper spot prices and physical delivery costs has widened significantly, reaching 40-50% in key Asian markets during the day's volatility.

Our initial coverage highlighted spot stabilization near $80.13 on February 1, with physical premiums already at 30-40% above spot and COMEX inventories down 70% since 2020. Since then, intraday swings have exacerbated the disconnect: spot dipped to $73.36 early today before climbing back, while physical prices in Shanghai and other hubs held firm above $110-$120, pushing premiums to historic highs of 50%+ during the trough. This "two-tiered market" underscores supply shortages, with China's export curbs and industrial demand (solar, EVs, AI) preventing arbitrage and fueling smuggling reports.

As of 10:00 AM PST (1:00 PM ET), COMEX spot silver hovers at $79.56 bid/$79.56 ask, down 7.49% intraday but showing signs of support above $78. Other sources report slight variations: $81.89 (Priority Gold), $80.67 (Forbes), and $78.77 (Trading Economics), reflecting real-time fluctuations. Silver is now 35% off its January high of $121.64, yet up 150% year-over-year. Futures show further backsliding, with March 2026 contracts at $82.205, signaling near-term tightness.

In U.S. retail, dealers like APMEX list spot at $79.56, but physical fetches premiums of 14-20%: a 1 oz American Silver Eagle at $95.55 (+$15.99) and generic rounds at $91.05 (+$11.49). JM Bullion shows spot at $79.34, with Eagles at $92.29-$94.29 (+$12.95-$14.95). These markups, 2-3x normal, have held steady despite spot's drop, effectively widening the relative gap.

Globally, the premium surge is stark: Shanghai physical trades at $111-$130 (40-50% over spot), India at $93-$113, Japan at $120, and Kuwait at $106. During spot's intraday plunge to $73, these premiums expanded by 13-54%, per market observers. Lease rates remain elevated at 8-35%, and EFP spreads have hit $1.10 from $0.25. Social media buzz highlights this "crisis," with users noting banks redeeming from ETFs like SLV to source physical amid a 350:1 paper-to-physical ratio.

To illustrate the widening disconnect, here's a table of current differentials across markets (as of ~10:00 AM PST), with intraday changes based on spot's low-to-current range:

Market	Spot Price ($$ /oz)	Physical Delivery ( $$/oz)	Premium ($/oz)	% Premium	Intraday Change in % Premium (from spot low ~$73)
US COMEX	79.56	N/A (paper)	N/A	N/A	Spot down 7.49% overall; dipped to 73.36 (-15% from open)
US Retail (APMEX Eagle)	79.56	95.55	+15.99	+20.1%	+5-7% widening during dip
Shanghai (SGE/Physical)	79.56	111.00	+31.44	+39.5%	+13-40% (held ~$111 while spot fell)
India (Wholesale)	79.56	93.00-113.00	+13.44 to +33.44	+16.9-42.0%	+5-15% (stable at higher end)
Japan (Wholesale)	79.56	120.00	+40.44	+50.8%	+10-20% widening
Kuwait/Dubai (Wholesale)	79.56	106.00	+26.44	+33.2%	+8-13% (physical resilient)

Data sourced from APMEX, market reports, and real-time analyses; premiums calculated over current spot.

Outlook remains polarized: "Bulls" are eyeing $130-$150 rebounds on deficits, while "Bears" like JPMorgan predict $50 crashes. Consensus forecasts $86.24 by Q1 end. Investors should watch deliveries and Asian premiums for signs of convergence—or further fracture—in this high-risk environment. It should be noted that JPMorgan is a major player in the COMEX market and their opinion may be tinged with some bias. See the supplemental report on JPMorgan below.

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JPMorgan Supplemental Report

JPMorgan Chase & Co. has long been one of the most influential players in the Commodity Exchange (COMEX) silver market, serving as a major bullion bank, custodian of physical silver vaults, and active trader in futures contracts. With control over significant portions of both paper and physical silver inventories, the bank has frequently faced accusations of market manipulation—claims that have led to billion-dollar settlements, criminal convictions, and renewed scrutiny amid the ongoing 2026 silver volatility. While JPMorgan has admitted wrongdoing in past cases, it maintains that its current activities comply with regulations, dismissing many allegations as unfounded.

JPMorgan's Dominance in COMEX

As the operator of the largest COMEX-approved silver vaults, JPMorgan holds billions of ounces in eligible and registered stockpiles, giving it substantial influence over delivery processes. The bank is also a key participant in futures trading, often maintaining large net short or long positions depending on market conditions. By late 2025, data showed JPMorgan flipping to a net long stance after years of prominent short holdings, amid a rally that pushed silver above $120 per ounce. This shift came as global supply deficits and industrial demand (e.g., solar panels, AI components) drove prices up 150% year-over-year.

Historically, JPMorgan inherited a massive short position from Bear Stearns in 2008, which critics argue allowed it to exert downward pressure on prices. At times, the bank controlled 24-32% of open interest in COMEX silver futures shorts, and up to 40% in front-month contracts—levels that enabled significant market sway. Alongside HSBC, JPMorgan once held over 85% of commercial net short positions, per class action lawsuits.

Accusations of Manipulation: A Pattern of Spoofing and Price Suppression

JPMorgan has been repeatedly accused of manipulating silver prices through tactics like "spoofing"—placing large fake orders to create artificial buy/sell pressure, then canceling them to profit from induced price moves. These allegations span decades but peaked in the 2010s:

• 2008-2016 Spoofing Scandal: JPMorgan paid a record $920 million in 2020 to settle U.S. probes by the DOJ, CFTC, and SEC for manipulating precious metals (including silver) and Treasury markets. The bank admitted wrongdoing, with traders executing hundreds of thousands of spoof orders to artificially influence prices. Several employees, including Michael Nowak and Gregg Smith, were convicted and sentenced to prison terms. John Edmonds, another trader, pleaded guilty to fraud in 2018.

• 2010 Class Actions: Lawsuits alleged JPMorgan and HSBC rigged silver futures by dumping contracts during low-volume periods to suppress prices, causing millions in losses for other traders. Plaintiffs claimed the banks controlled the market's "thin" liquidity to their advantage. A 2013 case argued JPMorgan's COMEX dominance indicated intent to manipulate.

• Broader Industry Fines: JPMorgan was part of eight banks fined $1.3 billion total for silver manipulation between 2016-2023. Other settlements included Treasury spoofing in 2020.

  
  

Critics, including whistleblowers like Andrew Maguire, have pointed to patterns where JPMorgan's trades coincided with economic data releases to drive prices down. Some estimate the bank's profits from these activities in the billions, though official figures focus on fines rather than gains.

Current Context: Renewed Scrutiny Amid 2026 Silver Crash

The January 30, 2026, silver crash—plunging 37% from $121 to $74 in the worst single-day drop since 1980—has reignited manipulation claims against JPMorgan. During the meltdown, COMEX data showed JPMorgan issuing 633 February silver contracts on the short side, closing positions at the exact bottom of $78.29—capturing massive profits while others faced liquidations. Social media and analysts question the timing, especially given the bank's history and role as a primary custodian. CME circuit breakers, meant to halt at 7% moves, failed to activate during the 30%+ drop, fueling "system rescue" theories.

As of midday February 2, silver trades around $79-80, with physical premiums widening to 40-50% over spot in Asia—highlighting a disconnect that some attribute to bank influence. JPMorgan's analysts, like Marko Kolanovic, predict a drop to $50 later in 2026, citing overvaluation. However, no new formal investigations have been announced, and the bank denies current wrongdoing.

Key Settlements and Positions: A Snapshot

To contextualize JPMorgan's history, here's a table of major manipulation-related events and the bank's evolving COMEX positions:

Year/Period	Event/Position	Details	Fine/Outcome	Source
2008-2016	Spoofing in Precious Metals	Thousands of fake orders to manipulate silver/gold futures prices.	$920M settlement; traders convicted (e.g., Nowak: 1 year prison).	DOJ, CFTC
2008	Acquired Bear Stearns Shorts	Inherited dominant short position (24-32% open interest).	N/A (led to later suits).	Lawsuits
2010-2011	Class Action Lawsuits	Accused of rigging with HSBC (85% net shorts); spoofing caused $30M losses.	Settled (terms undisclosed).	Court filings
2016-2023	Industry-Wide Fines	Part of 8 banks fined for silver manipulation.	$1.3B total (JPM share included in 2020).	DOJ
Late 2025	Net Long Flip	Held substantial long positions amid rally to $83+.	N/A.	CFTC reports
Jan-Feb 2026	Crash Involvement	Issued 633 short contracts; closed at $78.29 bottom during 37% drop.	Renewed accusations; no new fines yet.	COMEX data, X discussions

While substantiated evidence supports past manipulations, current claims remain speculative without regulatory confirmation. Investors should monitor CFTC reports and delivery data for transparency in this opaque market. JPMorgan's influence underscores the need for reforms, as echoed by former CFTC Commissioner Bart Chilton.

Sources for Main Article and Supplement::

Sources for Silver Market Update Article

1. CNBC: Silver plunges 30% in worst day since 1980 - Link (Details on the historic drop and triggers like Fed nomination).

2. The Wall Street Journal: Silver Prices Crash 31% in Second Worst Day on Record - Link (Live coverage of the crash and market context).

3. TheStreet: Silver bears flip bullish after prices plunge - Link (Analysis of margin hikes and analyst shifts).

4. YouTube (Arcadia Economics): Silver was CRASHED again Intentionally - Link (Discussion on the 30% drop and potential intent).

5. Babypips: The Silver Crash Explained - Link (Breakdown of the 31% plunge and monthly gains).

6. Zacks: Silver Crash: Lessons from Silver's Blow-Off Top - Link (Technical indicators and historical parallels).

7. Bloomberg: Gold and Silver Plunge as Wild Swings Rock Metals Markets - Link (Coverage of the 36% intraday decline).

8. YouTube (Mining Network): Michael Oliver on the January 30, 2026 Silver Market Crash - Link (Expert view on the pullback).

9. MarketPulse: Silver down 30%! – Chaos in the Metals Market - Link (Profit-taking and volatility analysis).

10. CoinDesk: The gold and silver bubbles may have popped - Link (Sharp declines from record highs).

11. Business Insider: Silver Price Crash: 3 Signs the Metal Could Be Headed for More Pain - Link (Outlook and warning signs).

12. The Conversation: Silver and gold hit record highs – then crashed - Link (Market surge and crash triggers).

13. Kitco: Gold, silver selloff was inevitable - Link (Overextension and broader trends).

Sources for JPMorgan Supplement Articles

1. Yahoo Finance: Silver Price Predictions: Why JPMorgan Warns Silver Will Crash Back to $50 - Link (JPM's bearish forecast).

2. The Block: JPMorgan says bitcoin futures oversold as silver flips overbought - Link (Positioning in silver futures).

3. MarketWise: Silver's Historic Surge and the Forces Behind the Coming Crash - Link (Allegations of suppression).

4. J.P. Morgan: OUTLOOK 2026 Promise and Pressure - Link (Official outlook including silver mentions).

5. The Pareto Investor: The Silver Market Broke - Link (JPM's physical deliveries and risks).

6. LinkedIn (Charles-Henry Monchau): JP Morgan Builds Largest Physical Silver Stockpile - Link (Holdings over 750M ounces).

7. J.P. Morgan: A new high? Gold price predictions - Link (Precious metals forecasts).

8. NY Post: JPMorgan forecasts gold to hit $6300 in 2026 - Link (Bullish on metals despite crash).

9. J.P. Morgan: 2026 Market Outlook - Link (Silver price targets).

10. YouTube (Silver Slayer): WAKE UP: JP Morgan Just Took Control of the Silver Market - Link (Dominance in holdings).

11. Reuters: JPMorgan to pay $920 mln for manipulating precious metals - Link (Spoofing settlement).