CME once again raised leverage ratios, seemingly determined to bring down leverage on precious metals, but the overall trend for non-ferrous metals will not change due to short-term suppression.

In the past month, global silver ETFs have increased by 1,000 tons, and the world's largest physical silver ETF holdings have reached 16,390 tons.

On the surface, LBMA inventories currently hold about 6,000 tons of spot silver, but in reality, they are essentially at zero (silver ETF lock-up), and COMEX inventories continue to be tight.

The latest data for the 1-year silver forward swap rate is -7.09%, which means the market is willing to pay an interest of 7% to secure physical silver 12 months from now.

If that’s not outrageous enough, the interbank silver leasing rate has already reached an annualized 39%, whereas under normal circumstances, the interbank silver lending rate is between 0.35% and 0.5%.

Many people like to compare the current situation to the Hunt brothers’ case in the 1980s, but that was over 40 years ago, and the historical context has long changed.

Tomorrow, January 1st, China’s silver export controls will take effect. Exchanges can clear leverage, but they cannot eliminate the fundamentals of supply and demand. The logic is simple: if there is a supply-demand gap, there is a gap. When the market can no longer exchange for physical, the only way to realize value is through price increases.

Soon, 2026 will arrive. The volatility of non-ferrous metals in January will not be small, but once you understand the logic behind it, you’ll know how to respond.

As inflation expectations rise, liquidity remains abundant, and the US dollar is heading toward its worst year in nearly a decade, with the yen and euro competing to be the worst, the industrial metals represented by gold, copper, and silver are still the kings...

This year is a good year, and next year will be too. See you next year...