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<p>[QUOTE=&quot;princeofwaldo, post: 26573327, member: 24091&quot;]I suspect much of the anxiety surrounding the potential drop in silver prices has less to do with refining backlogs or the spectacular gain in 2025 silver prices, than it does the tremendous expense to hedge right now.&nbsp; And if you can&#039;t hedge, buying silver with no way to move it from the warehouse and into the market for months is a very risky proposition.&nbsp; </p><p><br /></p><p>Volatility certainly plays a role in the higher cost to hedge, but so do lease rates.&nbsp; The severe physical shortage in London had driven lease rates much higher in October, which in turn made options much more expensive.&nbsp; That&#039;s all hypothetical now, because while there was a severe physical shortage in October, it eased precipitously shortly thereafter.&nbsp; But the actual lease rate here in December 2025 isn&#039;t published anywhere.&nbsp; You would need to be an expert in silver options, the beta of the option contract, and other nuances that only comes from years of participating in that market to know what&#039;s really going on.&nbsp; </p><p><br /></p><p>In other words, there&#039;s no way for mere earthlings to know, and the guys who do know aren&#039;t sharing their knowledge with anyone else.&nbsp; Instead, we all get daily YouTube feeds from people pretending to be experts, with little actual insight into the inner workings of the market.</p><p><br /></p><p>An interesting analysis from Twitter that suggest just how opaque the whole silver market is.&nbsp; It&#039;s difficult to identify what the driving force in the market is, and his suggestion that collateralized lending against precious metals has had an affect on prices makes a lot of sense, though there is little to suggest it is driving the spot price, but rather increasing the cost to lend metal for US dollars in the current market because of sanctions effecting access to the US dollar for countries like Russia or Iran.&nbsp; </p><p><br /></p><p><a href="https://x.com/izakaminska/status/1977999802785829119" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://x.com/izakaminska/status/1977999802785829119" rel="nofollow">https://x.com/izakaminska/status/1977999802785829119</a>[/QUOTE]</p><p><br /></p>

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