Silver Is On A Tear Today

Could be Force Majeure silver coming.
Force majeure in the silver market refers to contractual clauses invoked when uncontrollable events—such as mining strikes, natural disasters, or severe supply chain disruptions—prevent the delivery of physical silver
. Recent concerns highlight potential shortages, including low COMEX inventory and high demand, which could lead to cash settlements instead of physical delivery.
Key Aspects of Silver Force Majeure

• Definition: A legal clause relieving parties from fulfilling contracts due to unforeseen, uncontrollable events (e.g., pandemic, war, labor strikes).
• Supply Chain Disruptions: Events like the strike at the Peñasquito mine in Mexico or disruptions in the Middle East can trigger such declarations, affecting global supply
  .
• Market Impact: If a major exchange (like COMEX) or supplier declares force majeure, it can lead to massive price volatility and force cash settlements for derivative positions (futures, ETFs) if they cannot supply physical metal.
• Current Risks: A growing 176-million-ounce deficit, coupled with central bank hoarding and increased industrial demand, has increased the risk of delivery failures.
• Distinction from Default: While some fear a "force majeure default," others argue that a lack of inventory alone does not constitute force majeure unless caused by an "Act of God" or similar external event; otherwise, it is a contractual default.

Examples include CME Group declaring force majeure due to "operational limitations" on a NYC gold depository in 2012.

 

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And it just dipped under $88. Still up for thaw day.