Andy Schectman: Silver Breakout "Long Overdue," Here's What Changed

Silver Market Analysis & Trends – January 2026 Interview with Andy Sheckman

Key Concepts:

• COMEX & LBMA Deliveries: Increased physical delivery requests on the COMEX (Commodity Exchange) and LBMA (London Bullion Market Association) are a key indicator of shifting market dynamics.
• Critical Mineral Designation: The US and EU designating silver as a critical mineral is a bullish signal for the metal’s future demand.
• Chinese Export Controls: New restrictions on silver exports from China are impacting global supply and potentially driving up prices.
• Sovereign & Institutional Demand: Increased demand from central banks, sovereign wealth funds, and large industrial consumers (like Samsung) is a significant driver of the current silver market.
• Margin Increases (CME): The CME Group is increasing margin requirements for silver futures contracts, a tactic to curb speculative trading and potentially dampen price increases.
• AI-Generated Information & Disinformation: The emergence of AI-generated content regarding silver market analysis requires critical evaluation and fact-checking.
• Dollar/Silver Ratio & Geologic Rarity: The historical dollar/silver ratio and the relative scarcity of silver in the earth’s crust are factors influencing long-term price potential.

I. The Silver Price Breakout & Delivery Trends

The interview focuses on the recent significant price run of silver, particularly at the end of 2025. Andy Sheckman attributes this breakout primarily to the unprecedented increase in physical deliveries on both the COMEX and LBMA. Historically, less than 1% of contracts resulted in delivery; now, this figure is consistently exceeding that benchmark, reaching a record 12,575 contracts (62,875,000 ounces) delivered in December alone. This equates to a substantial volume – “many semi-truck trailers worth” – and much of this silver is leaving the COMEX system.

The key question raised is who is standing for delivery. Sheckman criticizes the lack of journalistic investigation into this phenomenon, noting it has been occurring for 14 consecutive months. In the first six trading days of January, 5,451 gold contracts (545,100 ounces, valued in the billions of dollars) and 6,321 silver contracts (31,650,000 ounces) have been issued and stopped – meaning possession was taken within the COMEX, moving the silver into an “eligible” category, effectively removing it from the market.

II. Geopolitical Factors & Supply Constraints

Several geopolitical factors are contributing to the silver market dynamics:

• US & EU Critical Mineral Designation: Both the United States and the European Union have designated silver as a critical mineral, signaling increased strategic importance and potential government support.
• Chinese Export Restrictions: China, which refines 60-70% of the world’s unrefined silver, has implemented stringent export controls, requiring refineries to obtain licenses from Beijing. These qualifications are now much stricter, limiting the number of companies allowed to export, and prioritizing domestic needs. A November memorandum explicitly stated China’s intention to prioritize silver for national security.
• Refining Bottlenecks: Rumors suggest similar export license requirements are being considered in Switzerland, a major refining hub, potentially causing delays in processing Chinese doré (unrefined silver). Swiss refiners like Pamp, Valcambi, Argo Herrera, and Metalor typically refine Chinese doré into Western-standard bars.
• Tariff Impacts: Existing and potential tariffs have created scarcity in the 100-ounce and kilo bar market in North America, with high premiums.

III. Shifting Demand Dynamics & Institutional Involvement

Sheckman emphasizes a fundamental shift in demand:

• Central Bank & Sovereign Wealth Fund Demand: He states that well-informed, well-funded traders – specifically central banks – have been standing for delivery since 2020, a highly unusual occurrence. This trend is now expanding to include North American institutional traders.
• Disintermediation by China & India: Chinese and Indian companies are bypassing traditional market channels, directly purchasing doré and concentrate from miners in Mexico and Peru, paying premiums and establishing direct refining capabilities. China is even building a deep-water port in Peru to facilitate this process.
• Industrial Demand: Companies like Samsung and Sony are actively securing silver supply, even exploring direct investments in silver mines. There are also reports of Chinese companies investigating silver substitutions in solar panels, though the impact on quality is a concern.
• AI & Technological Applications: Silver’s importance extends beyond traditional uses to critical applications in AI, digital electronics, and military technology.

IV. CME Margin Increases & Market Manipulation

The CME Group has been increasing margin requirements for silver futures contracts. Sheckman explains that this is a tactic to squeeze leveraged traders, forcing them to sell contracts to cover margin calls, thereby potentially suppressing price increases. He argues that this tactic is less effective now due to the increased participation of institutional investors who are not reliant on leverage. He describes this as “shaking the bushes” to benefit large traders.

V. AI-Generated Information & Due Diligence

Sheckman addresses the proliferation of AI-generated content regarding the silver market, specifically referencing a popular online source. While acknowledging the source provides valuable information, he cautions against accepting it as gospel, highlighting inaccuracies and unsubstantiated claims (e.g., incorrect information about Form 8300 reporting requirements and a non-existent executive order). He stresses the importance of fact-checking and critical evaluation.

VI. Price Projections & Long-Term Outlook

Sheckman avoids specific price targets but outlines several factors supporting a bullish long-term outlook:

• Historical Dollar/Silver Ratio: Historically, the gold/silver ratio has averaged around 45:1. With gold currently trading around $2,450, this suggests a silver price near $100.
• Geologic Rarity: Silver is significantly rarer than gold (approximately 7:1 ratio in the earth’s crust), which should be reflected in its price.
• Structural Deficits: The silver market has experienced structural deficits (demand exceeding supply) for six consecutive years, with deficits ranging from 100-200 million ounces annually.
• Changing Perceptions: Mainstream financial institutions (e.g., Bank of America, Morgan Stanley) are increasingly acknowledging silver’s value and recommending increased allocations to precious metals.

He concludes that silver is undervalued and that the current market dynamics suggest a strong probability of prices exceeding $100, with potential for even higher levels. He emphasizes that silver should be viewed as wealth preservation, not simply a speculative investment.

VII. Notable Quotes:

• “The lack of journalistic integrity is shocking to me across the mainstream.” – Andy Sheckman, regarding the lack of coverage of COMEX/LBMA deliveries.
• “It’s as unusual as 4 ft of snow in Death Valley in July.” – Andy Sheckman, describing the magnitude of the physical silver deliveries.
• “You don’t buy silver to become wealthy. You buy it because it is wealth.” – Andy Sheckman, emphasizing silver’s intrinsic value.

Conclusion:

The interview paints a picture of a silver market undergoing a significant transformation. Increased physical demand, driven by geopolitical factors, industrial applications, and institutional investment, is challenging traditional market structures and potentially setting the stage for substantial price appreciation. While short-term volatility is expected, the long-term outlook for silver appears bullish, particularly as its strategic importance and scarcity become increasingly recognized. The need for investors to conduct thorough due diligence and critically evaluate information sources is paramount in this evolving landscape.