1 Min Ago: The Secret Behind the $10 Gap: Why Banks Are Terrified by the $78.49 Figure | Buffett

Western screens show silver near $72, but Shanghai is reportedly paying $78.49 for metal that must be delivered—creating a $6.49 gap that signals a serious institutional “stress test.” In a normal market, that spread would be arbitraged away quickly by buying in New York and selling in Shanghai. The fact that it persists suggests the arbitrage bridge is breaking because immediate physical supply in the West can’t be sourced or shipped fast enough to satisfy Eastern demand.

The script argues we’ve shifted from a surplus regime—where paper contracts can set price—to a deficit regime where physical reality dominates and buyers bid for “survival,” not bargains. It cites evidence of panic-style behavior, including a 17.7 metric ton (~569,000 oz) withdrawal from SHFE in one session, rising physical premiums (around 11%), and a feedback loop where higher Shanghai premiums pull metal East, draining Western availability and widening the spread toward a potential $10 credibility-crisis threshold.

It also warns of a technical powder keg in the $75–$80 “gamma trigger zone,” where heavy call positioning can force market makers into mandatory hedging buys, especially during thin holiday liquidity—creating a “liquidity vacuum” that drives violent, step-like price jumps. The key signals to watch over the next sessions are: Shanghai’s opening price, the first hour of the New York open, physical dealer premiums, dealer stock/pre-order behavior, and big price moves occurring without meaningful volume—because rule changes can slow paper trading, but they cannot manufacture physical silver.

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