Silver just had a moment. The metal closed 2025 as the best-performing asset after a historic 26% surge in December, and people are starting to notice something unusual: this doesn't look like the blow-ups we've seen before.

The 1980 Hunt brothers squeeze? Different animal. The 2011 quantitative easing panic? Also different. This time, market participants are warning, the fundamentals have shifted in ways that make simple comparisons dangerous.

When those past rallies collapsed, leverage evaporated and prices fell because physical metal was still available. Today's market is operating under entirely different constraints—persistent deficits, exploding industrial demand, and increasingly restricted physical supply chains.

Why This Time Actually Is Different

Context matters. Back in 1980, the Hunt brothers used leverage to corner what was then a relatively small futures market. But inventories existed in size. When COMEX hiked margins and moved to "liquidation only" trading, the cornered longs got flushed out and the whole thing unwound.

The 2011 rally was driven by ETF inflows and investment demand—people hedging against quantitative easing. Solar and industrial uses were smaller back then, and above-ground stocks in Western vaults could eventually absorb demand once sentiment cooled.

Today, those vaults are running dry. For years now, silver demand has exceeded mine supply and recycling combined, steadily draining inventories. Industrial usage has surged, driven by solar panels, electric vehicles, and electronics. The market structure has fundamentally changed.

As veteran trader Francis Hunt explained in a recent interview for Commodity Culture, "people have a loss of trust in the western system and insist on physically holding and controlling the actual metal."

Margin Hikes Hit a Different Market

COMEX's recent margin increases land in this transformed landscape. Initial margin on the 5,000-ounce contract has jumped from $20,000 to $25,000 and now $32,500—a 62.5% increase that's shaken out leveraged speculators.

Hunt notes this "took some of the sting out of the thin markets," amplifying short-term volatility as weak hands got forced out. But here's the thing: forcing leveraged longs to liquidate doesn't magically create new physical ounces. Shorts also face higher margin requirements and growing difficulty actually sourcing bar-sized metal anywhere near futures settlement prices.

Margin policy can thin participation and whipsaw prices around, sure. But in a structurally tight market, it can't reverse years of supply deficits and overconsumption.

China's Strategic Move

Meanwhile, China hasn't banned silver exports outright, but it's done something arguably more significant: reclassified the metal as a strategic commodity. Every outbound ton now flows through just 44 licensed companies, making each shipment a political decision rather than a simple price response.

As Hunt put it, "Beijing knows every single ounce and who's doing it."

Given China's dominance in refining and its position as a major miner, this licensing requirement effectively converts a huge chunk of tradable silver into a policy tool.

The Paper-Physical Chasm

The clearest signal that something fundamental has changed? The gap between paper and physical prices has blown out to levels that should make everyone uncomfortable.

The heavily-traded COMEX March 2026 contract closed Friday at $72.265 per ounce. Meanwhile in Dubai, a major bullion hub, the cheapest one-ounce coin trades at $99.93.

That spread—nearly $28—is roughly equivalent to what an entire ounce of silver traded for in the not-so-distant past. This isn't a normal fabrication premium. It's evidence that paper contracts and physical metal have diverged into parallel markets, and only one of those can actually be melted, soldered, and used to power the world's technology.