When Silver Hits $70 and Refineries Can’t Keep Up

Silver just broke $69 per ounce on December 22, 2025. Gold crossed $4,400. Both metals have nearly doubled this year.

I’ve been in business for 30 years. I’ve been in cell phones. Forex. I ran a mint in Ohio.

I’ve researched the 1980 surge, the 2011 crash, and everything in between.

This time feels different.

Not because of the headlines about Venezuela or geopolitical tensions. Those stories matter, but they’re not what I see when someone walks through my door with a bag of junk silver.

What I see is a market that’s breaking in real time.

The Refinery Bottleneck Nobody’s Talking About

Here’s what happens when someone brings me silver today:

I can buy it. But I’m offering a steeper discount than I did six months ago.

Why? Because refiners won’t pay me out for weeks, maybe months. In October 2025, major U.S. refineries stopped accepting new silver almost entirely. The backlog stretches 10-12 weeks at some facilities.

One industry insider told me: “We’ve stopped shipping. Refiners won’t accept it. This hasn’t happened in over 40 years in the business. Something’s broken.”

Silver lease rates—the cost of borrowing physical silver—have hit 100% annually. That’s not a typo. Historical rates run 1-3%. When rates spike to 10%, that’s painful. At 100%, the cost wipes out any profit margin.

The last time refineries backed up this badly was January 1980, when silver hit near $50 for the first time. Back then, stores sold $1,000 face-value bags of 90% silver coins at 70% of melt value because waiting six months for refiners was worse than taking an immediate loss.

We’re not quite there yet. But we’re heading that direction.

The Liquidity Paradox

People see headlines about $70 silver and think they can cash out easily.

They can’t.

Most people just aren’t aware of the current market. Everyone’s excited their silver doubled in value. They want to sell. And that’s the problem—there are too many sellers.

Some people walk into my office expecting spot price. When I explain the reality, some won’t sell. They’re convinced they’ll find a better offer elsewhere.

Many come back after shopping around.

I pay probably the highest amount in the area. People call around, verify that, and deal with me right away. Others wait, hoping for something better that doesn’t exist.

Here’s the disconnect: Coin dealers have inventory on their shelves. Go to any shop and you’ll find silver for sale. But refiners can’t process what’s already in the pipeline.

The shortage isn’t in physical coins or bars you can buy retail. The shortage is in refined market silver—Comex and LBMA silver where there isn’t enough supply to meet institutional demand.

Over one weekend in October, the gap between spot and futures prices widened to nearly $3 per ounce. That’s extreme backwardation, where spot trades above futures because available metal is drying up.

The futures market seems to be pushing prices more than jewelry buyers or retail investors. That creates a strange situation where paper prices climb while physical markets clog.

What’s Actually Driving This Surge

It’s hard to be certain about what’s driving the prices.

The wars in Ukraine and Gaza certainly pressured the markets. There’s uncertainty around governments, even in the USA. The unrest over Venezuela makes people uneasy.

U.S. sanctions on Venezuela intensified this year and the recent boat attacks and oil tanker seizures have escalated tension. Ukraine attacked a Russian-controlled oil tanker in the Mediterranean. Gold and silver become safe assets when economic times feel uncertain.

But here’s what I actually see in my office:

Most sellers aren’t that interested in politics. They watch the spot price. When they feel like they have enough value or need cash, they call.

Some people are full of doubt about the dollar and economy. Others simply need cash and want to sell.

The buyers tell a different story. Investor demand surged this year as falling interest rates, rising fiscal concerns, and broader economic uncertainty drove people toward safe havens. In Q3 2025, investor and central bank gold demand totaled around 980 tonnes—over 50% higher than the average of the previous four quarters.

That translates to approximately $109 billion of quarterly demand inflow, about 90% higher than the average of the previous four quarters.

Industrial demand remains robust too. Solar panels, electric vehicles, data centers—these sectors keep consuming silver. The Silver Institute’s December report titled “Silver, the Next Generation Metal” explains that heavy demand through 2030 comes from cleantech and emerging technologies like AI. The U.S. government added silver to its list of critical minerals this year.

How This Compares to Previous Surges

We’ve seen two previous super bull silver years. They were totally different from each other and from this one.

I still get trigger happy when silver shoots up $2 in one day. My instinct says sell or short. Most of the time I’m frustrated short term but glad long term I didn’t act on that impulse. Silver and gold just keep going, far exceeding my expectations this year.

Instinct can be really good or bad. I make bad emotional decisions, so I try to be careful not to make impulse buys or sells.

When I ran the mint, bad news drove sales. It didn’t necessarily drive prices except when Silicon Valley Bank and a few others went illiquid in 2023.

This time there just doesn’t seem to be a ceiling.

You just have to strap in and hold on.

When silver hit $40, the all-time high of $50 became plausible. At $50, many people thought that was it. They didn’t expect it to crash like in 2011 or 1980. But they didn’t expect it to moon either.

When it hit $60, respected analysts suggested it would dip to the low $50s again.

Instead it’s pushing for $70.

The Market Reality Check

Here’s the truth nobody wants to hear:

You’re just not going to get spot for precious metals right now. Maybe not ever.

I know some people are disappointed when they hear that. But I get repeat customers for a reason. We have lots of 5-star reviews because people appreciate transparency over false promises.

The market is super soft for sellers right now. Buyers for silver are scarce. Refiners don’t want junk silver. When people come to me, I offer what I can based on actual market conditions.

Some people tell me the offer is too cheap. Many shop around and come back.

I want people to walk away feeling like they got a fair deal, even when market realities mean the price isn’t what they hoped for. That’s harder in this environment than usual.

What Happens Next

Disclaimer: I don’t have a crystal ball. This isn’t financial advice. Do your own research.

The new year is right around the corner. Only time knows what will really happen with gold and silver.

But I can tell you what I’m watching:

The supply-demand imbalance has to resolve somehow. Either refineries catch up, prices adjust to slow demand, or something breaks in the paper markets.

Refining infrastructure worldwide has reached maximum operational capacity. Major refining centers across North America, Europe, and Asia report unprecedented backlogs. Several facilities declined new business entirely due to processing limitations.

Market analysts see $70 as the next short-term target for silver. “Silver is pulling gold up with it,” said Marex analyst Edward Meir.

Momentum indicators remain positive. The uptrend looks solid for now.

But I’ve seen this movie before. When everyone thinks prices can only go up, that’s usually when they don’t.

What This Means for You

If you’re sitting on precious metals right now, here’s what you should actually consider:

Liquidity matters more than price. A high spot price doesn’t help if you can’t convert metal to cash when you need it. The gap between spot and what you’ll actually receive has widened significantly.

Timing is uncertain. I’ve watched silver surge $2 in a day and thought about selling, only to see it climb much higher. I’ve also seen crashes that wiped out gains in weeks or even hours. Nobody knows which comes next.

Local matters. When markets get weird, having someone you can actually talk to face-to-face becomes valuable. Online buyers and mail-in operations have their own challenges during volatility.

Education beats speculation. Understanding why refiners are backed up, why lease rates spiked, and why physical markets behave differently than futures markets helps you make better decisions than following headlines.

I’ve been building businesses for almost 30 years. I’ve seen ups and downs. There aren’t huge secrets, just experiences you don’t get when you’re not part of these businesses.

What I know for certain: This market is moving faster than infrastructure can handle. That creates opportunities and risks that most people don’t see until they try to execute a transaction.

The people getting the best outcomes right now are the ones who understand the difference between paper prices and physical reality.

The rest are learning expensive lessons.