Shuffling of Silver Reduced Strain on Global Market… for Now -

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up don’t miss an incredibly informative interview with Rhona O’Connell, Head of Market Analysis with StoneX Financial – a global leader when it comes to financial services, commercial hedging, foreign exchange and physical commodities. Rhona has over 40 years of experience as a commodities analyst and is a recognized authority in the precious metals sector.
Mike Maharrey and his guest this week dive into the burning question on many metals investors’ minds of why gold and silver don’t seem to be acting like a true safe haven in the midst of a tenuous geopolitical backdrop given tensions between the U.S. and Iran. Rhona always weighs in on the cracks in the private credit market and what she believes that may be a potential tailwind for gold moving forward.
So, be sure to stick around for our exclusive interview with StoneX’s Rhona O’Connell, coming up after this week’s market update. And if you enjoy this material, please do us a favor and like and subscribe to this podcast wherever you consume this content.
Silver has certainly grabbed a lot of headlines over the last six to nine months. And supply tightness played a key role in the fireworks we’ve seen when it comes to the white metal. The movement of silver out of the U.S. has helped ease market tightness, but an ongoing structural supply deficit makes the metal vulnerable to future squeezes.
Silver went on an incredible run late last year after taking off in October as <a href="https://www.moneymetals.com/news/2025/10/20/london-india-and-the-anatomy-of-a-silver-squeeze-004422">a silver squeeze gripped the market</a>. The metal opened in 2025 at about $29 and didn’t crack $40 until September. When the year ended, the price sat at nearly $72. At its peak, silver was up 147 percent intra-year. The average price came in at $40, a 42 percent increase.
A convergence of factors, from market dynamics to logistical problems, led to the October squeeze and <a href="https://www.moneymetals.com/news/2025/12/29/silver-squeeze-20-drives-price-over-80-004576">a second squeeze late last year</a> that briefly drove silver prices over $100 in January.
While the market dynamics that got us here might be difficult to untangle, the situation is about as basic as it gets.
There’s not enough new silver supply being pulled from the ground. The silver market recorded a supply deficit for the fifth consecutive year in 2025.
As we mentioned a week ago, last year demand outstripped supply by 40 million ounces, driving the 5-year market deficit to 716 million ounces. To put that into perspective, total silver mining output last year was 846 million ounces. And Metals Focus forecasts another 46-million-ounce supply deficit this year.
The stage was set months earlier when tonnes of silver moved from London to New York due to tariff worries. As President Trump began levying tariffs in April 2025, silver streamed into the U.S. CME silver holdings, eclipsing the record set during the pandemic at 531 million ounces.
Meanwhile, metal bled from London vaults.
Much of the silver remaining in London was already committed to ETFs. That left very little “free float” metal to provide liquidity to the London market. According to Metals Focus, the share of London silver stocks, not allocated to ETPs, fell to just 17 percent by the end of September 2025.
That set the stage for the first squeeze, and a surge in Indian silver demand last fall was the pin that popped the bubble.
Initially, Indian buyers were primarily sourcing silver from Hong Kong, but they reportedly shifted more toward London during the Chinese Golden Week Holiday in the first week of October.
But London vaults were already tapped out.
As the squeeze intensified, silver lease rates exceeded 200 percent, reflecting the strain in the market.
After a healthy correction in January, the market has stabilized, with silver prices settling in a range between $70 and $85 an ounce.
The movement of silver out of the U.S. to parts of the world in shortage helped to settle the market.
About half of the departing metal went to London. However, there was a significant increase in silver exports to the UAE and Hong Kong.
While the amount of silver in London vaults has barely budged this year, the amount of “free float” silver available for trading or delivery has increased as metal committed to ETFs dropped after the price correction. Global silver ETF holdings have declined by around 70 million ounces (5 percent) year-to-date.
Currently, the amount of free float silver in London stands at around 235 million ounces, the highest level since December 2024. That’s up approximately 116 million ounces since the low last September.
While the shuffling metal between the U.S., London, the Middle East, and Asia have taken the strain off the silver market, this has not solved the fundamental problem.
It’s like a game of musical chairs. Everything seems fine while the music is playing. However, when it stops, there are going to be problems.
Well before we get to the interview let’s get an update here on the price action for the week.
Gold is up an even $100 or 2.2% now on the week and checks in at $4,726 an ounce.
Silver is up $5 and currently trades at $81.09 an ounce as of this Friday morning recording.
Turning to the PGMs, platinum checks in at $2,052 an ounce, up 2.6% since last Friday’s close. As for palladium, the industrial metal is actually down $50 or 3.2% to check in at $1,491.
Well now, without further delay, let’s get right to this week’s exclusive interview.
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Mike Maharrey: Greetings, I'm Mike Maharrey and I'm joined today by Rona O'Connell. She's the head of market analyst at StoneX. How are you doing today?
Rhona O’Connell: I'm very good indeed. Thank you, Michael. How are you?
Mike Maharrey: I'm doing well. It's a pleasure to talk to you and appreciate you taking a little time out of your day. I know it's toward the end of your day in London. I'm just kind of getting started over here in the US, but I appreciate you coming on the show.
Rhona O’Connell: I'm closer to cocktail now than you are.
Mike Maharrey: Yes, indeed. And lucky for you. But we have to get through this interview first before you can have your cocktail. Oh, shucks. Sorry. That's the way it goes. So what I'd like to do first is I'm not sure that everybody's going to be familiar with StoneX. We've been familiar with some of the output that you guys have put out and it's fantastic, but I would love for you to just give an overview of what you do and your role at StoneX.
Rhona O’Connell: Yes, absolutely. StoneX is described, or StoneX the company, it was described a couple of years ago by one of our senior economists as the largest company you've never heard of, which is probably quite a good way of putting it. We're financial services, and that means that we cover all sorts of areas from the commodities markets, which is obviously the London Metal Exchange markets and the precious metals through to ags, dairy, softs, energy. We have a very powerful global payments division, which is focused on facilitating payments between one central bank and another, usually from a major one to something slightly more obscure. And we have a system which makes that sort of smooth and easy to do. And we have a team which they call themselves Global Prime, and that predominantly revolves around equities. So our customer base, which is both institutional and retail, is pretty much global and covers virtually all the different sectors to one extent or another, as far as the different financial elements are concerned.
We were founded in 1923 by Mr. F.C. Stone. And we changed our name to StoneX about 60 years ago. Before that, we were INTLFC Stone having acquired various different companies along the way. But Mr. F. C. Stone started out his professional life as a door-to-door egg salesman in Chicago.
Mike Maharrey: Oh, wow!
Rhona O’Connell: And we've grown from there. Yeah.
Mike Maharrey: That's a great story.
Rhona O’Connell: As far as I'm concerned, I'll just give you a little bit of background about me. I've been in the markets almost exclusively, but not totally the precious metals markets since 1981. I have covered the LME suite as well. I started at Consolidated Gold Fields when I was not long out of university as a baby metals markets analyst. Gold Fields, at that point, was the world's second largest gold mining company behind Ingle American. And I was very lucky to get that job because they advertised for two graduates and the self-starter was going to be on the oil side and the baby, which was with me, went on to the precious metals team. And that was the most wonderful grounding because rather than starting my career as an observer of the markets, I was actually in there doing it.
We covered the gold market because consistently, obviously we did. But for one of the years that I was there, my boss and I were seconded to … No, not seconded. We were instructed basically to do an in- depth outlook for the evolution of the silver market, which formed part of the feasibility study for advanced exploration project. We did not bring on stream because this was the early '80s and we'd been up to $50 allowance, but we were going back to between five and 10 and it wouldn't have been viable. And then we did a similar exercise for the platinum group metals, again, looking out over 10 years, but there were three of us doing that one. And that was part of the feasibility study for what is now the northern platinum mine in South Africa. So I have actually been inside the industry as well as working in the financial sector.
And I do think that for any analyst to do their job properly, you do actually need to have been hands-on to kick off with. So that's what I do.
Mike Maharrey: Oh, that's a fantastic background. It's wild to think about how much you've seen change since the 1980s. Think about what the price of gold was in 1980 compared to what we're seeing today. You've definitely seen it all, so to speak.
Rhona O’Connell: Well, it had already hit $850 in early 1980s. I started in second quarter of 1981, but obviously is gold an inflation hedge. In those days, it was definitely seen as the inflation hedge. Now one of the big changes, particularly, well, from the point of view of the professional investor, yes, gold is an inflation hedge up to a point. It's much more important as a mitigator of risk. And if you're looking for an inflation hedge pure and simple, you're much better off with the TIPS index by definition, treasury inflation protected securities. But looking at gold's price performance in real terms and using the US CPI as the deflator, that $850, which was hit on an intraday basis, wasn't a fix, it was just an interday print, equates in today's money to $3,590. So we actually took out that high in real terms in April of last year, just before the tariff day … Actually, no, it was just after, I think, but it was in early April.
So we are now consistently making highs in real terms, or at least we were until the end of January. So it hasn't worked as a perfect inflation hedge, but it's not actually supposed to. That's not what it's there for.
Mike Maharrey: Can you explain, go into a little more depth about what you mean by a risk mitigator?
Rhona O’Connell: Sure. There are two or three different ways of looking at it. Let's get the complicated one out of the way first because then we can all relax.
If you think of a professional portfolio, let's say a mixture of equities and bonds, which is basically what most people would run. If you take a chart and you have reward along the X axis, let's say, and risk along the Y axis, and you plot the two of them together, you'll get a curve. Generally speaking, a lot of quantitative research has been done on this subject. If a portfolio manager adds a little bit of gold into his portfolio, and obviously everybody will have different strategies, then almost invariably, you will find that gold will push what is called the efficient frontier, which is that curve that I'm talking about. And by pushing it, what I mean is that you will find that for the same level of risk, by adding gold, you'll get a better reward.
Conversely, for the same level of reward, you'll have a reduced risk. Now, it's not perfect, but it works all easily 95% of the time. So that's what I mean by mitigator of risk in that particular respect. Now, that takes us on to the next area whereby when the equity markets in particular, but sometimes also the treasuries, find themselves in meltdown, the gold price almost invariably falls. And I can't count the number of times, A, that's happened, and B, that I and my peers across the industry have been asked,
“Why? I thought this was supposed to be a hedge against risk and the price has come off. Help, I don't understand.” The answer is that in this context, mitigator of risk is probably best described as insurance policy, because although the gold market is relatively small, it's very, very deep. And actually in terms of daily turnover and dollar terms, it's actually in the second behind the S&P and it's ahead of US treasuries.
So, when equity markets are in a tailspin, you will almost always find that equity investors who have gold will sell part of it, and that's because it's a deep and liquid market, and you will always get a counterparty. Whereas if you've got an equity market that's on the skids, you might not. And therefore, a lot of people will liquidate some of their holdings in order to generate cash to meet against any margin cause that they may run into in following days. And I did an exercise on this. Well, lots of people have done it, but I did something for StoneX about three years or so ago. And it's still valid because it's a theoretical piece as opposed to having a time, a shelf life, shall we say. And our Far Eastern desk helped me out in that I wrote a very short, very simple questionnaire, which they then took out to Far Eastern wealth managers.
And basically, what I asked was, or have you held gold? And if the answer is yes, then you carry on with the questions. "Have you sold in times of distress? Did you buy it back and when did you buy it back?” And almost to a man, they said, "Yes, we do hold it. Yes, we have sold it. Yes, we have bought it back and we bought it back when the dust has settled.” So, it acts as an insurance policy. So it does come down, but then it comes back again. Example, COVID, now that's distressed with a capital D. Gold was sold off when the equity markets and pretty much all the other commodity markets were falling very sharply. And a year or so later, my colleague who covers the base metals and I put together a table looking at different asset classes and the percentage by which they've fallen from the peak in the March until they stopped falling, obviously, and how long has it taken them to unwind all those losses?
Gold dropped by something like 7% and had unwound its losses within six weeks. Most of the other industrial metals dropped by double digits and took months to recover, and the S&P took even longer than that. So, that's a tangible example of how it works. So, that's what I mean by mitigator of risk. And then of course, we have the longer term concept of the fact that it's the asset of last resort. The thinking behind that being that it's a currency and it's the only currency which is not underwritten by anybody, any other central bank. So, it's globally accepted and that therefore also means it's something to which people will flee, not necessarily in times of trouble, although that happens, but also in order to make sure that they've got something there that they can fall back on just in case. So that's basically what I mean by asset of last resort mitigator of risk.
Mike Maharrey: Outstanding. Excuse me. I'm so glad that you explained that because as you know, we saw that drop at the beginning of the Iran conflict and a lot of people were coming to me like, "This is supposed to be safe haven. It's selling off.” And you just explained exactly how I was explaining it, so that makes me feel better to know that I'm on the right track there. But no, that's a fantastic explanation. So, speaking of the Iran conflict, it seems like right now that that's the primary driver of everything and we're swinging based on whatever the latest news of the day. And of course it switches on a dime. Kind of what's your take on how the war has altered the dynamics in the gold and silver markets or has it really, or is it still underlying things that are kind of pushing things along? How do you see this war factoring into things?
Rhona O’Connell: Well, we could talk until the sun's over the horizon at your end, as well as over mine on this one. It's all about uncertainty at the moment. Geopolitics is obviously one of the key areas that's been feeding into gold investment or just investment activity over the last 18 months or so, basically since President Trump started his run for power. But with respect to your specific question, what we have here is obviously geopolitical conflict, which is feeding into commodity prices, massive supply chain disruptions, which could lead to recession, could lead to stagflation. And I've heard both of those words used in America over the last two or three days, stagflation notably from a couple of members of the FOMC. Recession, can't remember who that was, forgive me, but it's out there.
And what this has done, apart from, as you said, the selloff and the subsequent stabilization, there's been a little bit of bargain hunting, but not very much because we've had so many on again, off again situations with respect to talks, resolutions of the differences, will it happen? Won't it happen? How long is it going to last? Now, as you and I speak, it looks as if there may actually be a genuine kind of breakthrough coming through, which is one of the reasons why the gold, one of the reasons why the gold price has gone up. And we'll come back to that because I'd like to talk about how it seems to be doing what it shouldn't be doing, but let's just go back a little bit.
Essentially, over the last three weeks or so, certainly talking to my colleagues on our bullying desk and talking to other people in the industry, very few people, and it's not just gold and silver here, have been prepared to commit to anything just about. No one wants to commit capital. No one wants to go risk on in either direction, regardless of which asset class you're talking about, unless you happen to do one of the big seven in the AI S&P, of course, whether animal which has laws unto itself. And that is one of the reasons why the price of both metals until yesterday have been trading very, very narrow ranges by comparison with the previous 18 months or so. Gold's been in a range of about 5% silver as is typical because silver's got quite a high beater with respect to gold, that's been a range of about 12%.
Then they're poking their noses up towards the top of the ranges today, largely because we've got the potential talks about having peace on the horizon.
Normally, in thin conditions, you would expect volatility, but this time around, nobody really wants to see very much of a wide price range because they don't know quite how much risk there's going to be because they don't know who's going to say what to whom in the next 48 hours. So it's been stable where some other things have not been. And really what is … The way one of the dealers put it the other day was, because I said it's looking at the bond market primarily, and he said, yes, it is. And it's also looking at headlines. And I thought that was a lovely way of summing it up. It was reacting to headlines. Now, one of the things which will tell you why people or will illustrate rather the degree to which people really don't want to get involved at all at the moment is that over the last five or six weeks or so, practically every time the gold price has changed direction, it's either been because of the change in bond yields, most notably over the last week or so, or when it's been veering very close to one of the important moving averages.
So, it's being governed by technicals, essentially. Now, of course, all of these things are related to one another. The dollar is a barometer for confidence in its own right. Bond yields, likewise. Then you've got the move index, which is the volatility and bonds. You've got the VIX index, which is volatility in equities and gold's negative correlation with those two at the moment is relatively strong. So everybody who is involved, who needs to trade, is basically taking those … As far as I can see at any rate, looking at the charts and so forth, they're taking the signals from those parameters because they don't want to commit to anything else until we know whether and when we've got a holding truth in the Middle East.
Mike Maharrey: Yeah. It's so hard in this day and age. And even going beyond the war, regime uncertainty is the term that I really like. And that seems to be the rule of the day here, especially here in the United States. We don't know what Donald Trump's going to do next. He may decide we're not going to have any tariffs tomorrow. And then … So, I can't imagine having to be a decision-maker in this environment.
Rhona O’Connell: Oh, I'd hate it. And one of the elements, and I said we've got uncertainty about the Gulf War, we've got uncertainty in Europe because it looks like Europe may be about hit recession, and we could well be in for a rate hike coming from the European Central Bank. For that matter, if Gulf War is protected, and let's pray that it isn't, there is a faint possibility of a hike coming from the Fed. It's unlikely that we're going to get a cut until the final quarter, but we might get a hike because PCE at 3.4%, I think it is, is unacceptable if you're going to pursue the dual mandate. Although I'm not quite sure whether 2% is ever going to be feasible again, to be fair.
Mike Maharrey: Do you think it's fair to say that the Fed and central banks in general are kind of between a rock and a hard place right now? Because on the one hand, you've got obviously inflationary pressures. And then on the other hand, you've got these piles of debt, and so debt doesn't play nicely with interest rates. So what do you do as a central banker? I think you do exactly what the markets are doing. You kind of sit pat and wait to try to see which direction and when's that ultimately going to blow.
Rhona O’Connell: Well, Jay Powell's been using the term data dependent for a long time, as is Europe, and as they should be. There's not a lot of fiscal space in Europe. There's not a huge amount in the states, and the state's GDP … Sorry, the state's national debtor GDP I think is around about 110% now. Europe is not far behind. So yes, they have their hands tied to a certain extent, but one of the things that I've been watching apart from the Gulf with respect to geopolitics is, well, there's two things. One's geopolitics, one is financial. I know it might sound like a side issue, but I'm particularly interested, and I have been for months, in the decision from the Supreme Court, as and when we get it, on the Lisa Cook case, because when the president wanted to fire her for alleged, and the important word here is alleged, misinformation when she was looking to take out a mortgage on what turned out to be a second property, not a first one, she sued because if she did it or if she didn't do it, either way, it was still an allegation.
So, the court's found in her favor, and it's the administration which is on appeal to the Supreme Court. Now, my strong expectation, particularly looking at the way that the judges were questioning Scott Bessent last year, albeit on a different issue, is that I think they'll throw it out, and I hope they do. The reason being here that I think is really important is that if they've found in favor of the appeal, then the actual person by person makeup of the FOMC is a side issue here. For me, what's much more important is that that would blur the distinction between the legislative, the executive, and the judiciary, i.e., The separation of powers, which is a very important cornerstone of the US Constitution. So, if that were to happen, I suspect you might have a problem in the treasury market, and perception is everything here. There would almost certainly be a perception internationally that US monetary policy was not necessarily going to be in safe hands because in principle, it could be vulnerable to changes every four or eight years.
I'm not saying it would happen, but if the markets run scared because they think it might, then you might get a run on the dollar and you're almost certainly seeing money coming out of the treasury market. So that's one thing that I'm watching closely. The other one is shadow banking and private credit, which is not regulated. I've seen estimates of two trillion to 10 trillion involved in that sector, US and Europe combined. It's not just a US phenomenon at all. It's not regulated. The banks have been offloading debt in order to be able to recapitalize and carry on with what they're supposed to be doing. But this has gone into private hands and we're already seeing cracks in the system whereby any large scale investor who wants to take out a lot of money in one tranche is having problems doing so. So there's a stress there.
And I was watching the Senate Q&A with Jay Powell be about a year ago now, I guess, maybe even slightly longer after his congressional biannual testimony. And the last question in the session, I can't remember the name of the Senator, but she said to him, "Chair Powell, you and I have talked about this privately a lot in the past. Could you tell us what you think about the potential risks to the system for private credit?" And he said, "It could be with us for years," or words to that effect. So, the Fed's aware of it, and I'm pretty sure the European authorities are watching it very closely as well, but it goes back to the subprime in 2007. A smoking gun is probably the wrong term for it, but it was there and not many of us took very much notice of it. It's very close to me because I didn't see the importance of it until it was too late, and it still hurts.
I wasn't the only one, I feel as if I should have done, but maybe I've got a little bit too much emphasis on private credit because I've still got that sting, but I do think it's something that needs to be watched, and that's another tailwind for gold.
Mike Maharrey: Yeah. I'm glad you mentioned those two things. I think you might be a mind reader because my next question was going to be, what are a few things that you see that are going on that maybe are being missed? So thank you for answering my questions before I asked them. I love it.
Rhona O’Connell: That's a pleasure.
Mike Maharrey: So, I've got a couple more things before I get you out. We're about to run out of time, but I do want to ask you just, I said I wanted to ask you a fun question, so here it is. Do you have a favorite gold coin or round or silver, either one or a bar or a particular investment in the precious metal circle that you really, really like? And if so, why?
Rhona O’Connell: Generally speaking, they'll all carry about the same level of premium or given the current state of the retail market discount. So I'm going to give you a feminine response as opposed to an analyst response, and I'm going to tell you which ones I think are the prettiest. And gold and silver, both, it would be a toss-up, oh dear, no pun intended. I really didn't mean to say that. Between the cornucopia coin that Pamp produces in Switzerland and the Vienna Philharmonic, that is so beautiful with the musical instruments. And then for fun, you've got the Chinese panda and the Australian koloa bears.
Mike Maharrey: Those are all excellent answers. I always tell people my favorite's the Krugerrand, not because it's particularly beautiful, but because it was my grandfather's favorite. And that's kind of what got me interested in gold.
Rhona O’Connell: Oh, the Krug is beautiful as well.
Rhona O’Connell: The World Gold Council is the offspring of the International Gold Corporation in Intergold, which was actually formed by Don McKay Coggill, who was an Oxford Cambridge blue, sorry, Oxford Cricket Blue. And when I was at Goldfields, we'd get letters coming through from Goldfield of South Africa, obviously. And the franking on the top right-hand corner of the envelope, back in the early 80s, was “Gold is Money You Can Trust.” And Gee was the one who founded the Krugerrand. So that's where that comes from, back in the annals of history. And then when the apartheid regime was hitting the headlines left, right and center, there were sanctions and so on and so forth, the World Gold Council was formed in London. And that was basically, as I say, the offspring of Intergold.
Mike Maharrey: Very interesting. Still true today, right? Gold is money you can trust.
Rhona O’Connell: Takes us right back to full circle. That's exactly what it is, yes.
Mike Maharrey: Indeed. Before I let you go, I do want you to let folks know where they can learn more about StoneX and avail themselves to the things that you guys have to offer.
Rhona O’Connell: Sure. Yeah. Well, the easiest way to do it is on the website, which is stonex.com. And everything's in there.
Mike Maharrey: It's about as easy as it gets, right?
Rhona O’Connell: Yeah. We try to make things simple.
Mike Maharrey: Absolutely. And that's a good thing because there's enough complicated stuff as we have discussed. We could sit here and talk as you say until the sun sets and rises again over here in the United States, but we both have other things to do, so I'm going to let you go, but I really do, again, appreciate you taking time out of your day to hang out with me. And I'm sure folks will appreciate your insights and we'd love to have you back at some point in the future. So thank you again.
Rhona O’Connell: It's a great pleasure. I've thoroughly enjoyed it and I'd love to join you again.
Mike Maharrey: Well, thank you so much.
Rhona O’Connell: Hopefully in happier, kinder times.
Mike Maharrey: Yes, indeed. Thank you.
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Good stuff there from a long time and very knowledgeable commodities and metals analyst and it was great having Ms. O’Connell on the program for the first time here this week.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. And to check out any of our audio programs, including our second podcast, the Money Metals Midweek Memo, just visit <a href="https://www.moneymetals.com/podcasts">MoneyMetals.com/podcasts</a> or find them wherever you listen to your favorite podcasts. And as a big help to us we would ask you to please like, subscribe, download and rate our podcasts. Doing so helps us extend the reach of this material.
Until next time, this has been Mike Gleason with <a href="https://www.moneymetals.com">Money Metals Exchange</a>, thanks for listening and have a wonderful weekend everybody.

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