Silver rally driven by physical shortage, not speculation: Peter McGuire

The most compelling signal behind silver’s explosive rally is not speculative frenzy but a genuine physical shortage, according to Peter McGuire, Chief Executive Officer of trading.com.McGuire pointed to a striking imbalance at the London Bullion Market, which holds around $700 billion worth of gold for liquidity purposes but has “not a single ounce” of silver available for similar events. He attributed the shortage to decades of underinvestment in capital expenditure.

He said the recent 10–15% rally in precious metals has caught many by surprise, with silver already up nearly 175–180% year-to-date. “That’s the issue. That really captures a lot of the mindset, and traders are looking at silver as the standout,” he said, describing the market as being in overdrive and likening it to a “V12 Lamborghini on an autobahn.”

He also warned against shorting the metal. McGuire expects silver to push toward $92 to $95 by the end of January, if not sooner.

On the demand, he stated silver’s essential role as a conductor in technology, photovoltaic cells, and electric vehicles, adding that it is listed among the 60 critical minerals identified by the US administration. The tight physical market, he said, also raises the risk of a classic short squeeze, as investors holding long paper contracts could demand delivery, forcing short sellers to chase scarce physical metal.

Also Read: Silver may hit $100 an ounce, gold could top $5,000 by 2026: IBJA’s Surendra MehtaMcGuire is similarly constructive on gold; projecting prices could rise to the “$4,745” level. He said the outlook is supported by a weakening US dollar and fast-moving geopolitical developments involving Russia, Ukraine, and Venezuela, which he expects to influence markets in the near term.

Turning to crude oil, McGuire outlined two key scenarios for the first quarter (January to March) of 2026. A peace agreement in conflicts such as Russia and Ukraine could remove the “war premium,” potentially dragging Brent crude down to $58 per barrel and WTI crude to the $54–55 range. Alternatively, he pointed to increased US drilling plans that could lift American production to 15.5–16 million barrels per day over the next couple of years, creating excess supply and pushing prices lower — a development that would benefit consumers globally and help ease inflation, particularly in India.

Also Read: Copper likely to lead commodities in 2026; gold, silver to deliver steady returns: Nirmal Bang

For the entire interview, watch the accompanying video

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