Despite significant selling pressure, falling prices and continued volatility, silver’s underlying fundamentals remain firmly in focus. Matthew Piepenburg of Von Greyerz believes the current weakness is temporary and that the longer term outlook for silver remains exceptionally strong, particularly as global debt levels rise and confidence in traditional currencies comes under increasing pressure.
Silver has experienced considerable volatility throughout 2026, with prices retreating towards US$52 an ounce after a period of strong gains. For some market participants, this pullback has raised concerns about whether the precious metals rally has run its course. However, Matthew Piepenburg believes investors should look beyond the daily price movements and examine what is happening beneath the surface of the global silver market.
Speaking with Commodity Culture, Piepenburg argued that concentrated short positions on Western futures exchanges, particularly the COMEX, have played a significant role in suppressing silver’s paper market price.
He maintains that the disconnect between paper trading and physical demand is becoming increasingly important, particularly as demand from Asia continues to influence global precious metals markets.
The paper silver market and concentrated short positions
Piepenburg is highly critical of the structure of Western precious metals trading, arguing that large commercial banks and leveraged market participants have an outsized influence over short term price movements.
He believes substantial concentrated short positions have contributed to silver’s recent weakness and questions whether the paper market accurately reflects the underlying physical supply and demand fundamentals.
His argument centres on the difference between trading silver through futures contracts and owning actual physical silver.
In the futures market, enormous quantities of silver exposure can be traded without the buyer taking immediate possession of physical metal. This creates a market where financial positioning, leverage and algorithmic trading can have a significant influence on prices.
Piepenburg argues that these dynamics can create temporary price distortions, particularly when large institutions hold concentrated positions.
It is important to distinguish his interpretation of market activity from independently established evidence of current manipulation. Nevertheless, the relationship between paper trading, physical availability and price discovery remains an important issue for precious metals investors.
Why silver has come under pressure in 2026
Piepenburg also identified several other factors contributing to silver’s recent decline.
Higher bond yields have increased the opportunity cost of holding precious metals, which do not generate interest income. When government bonds offer higher yields, some investors move capital away from gold and silver.
Another factor is the growing influence of leveraged funds, hedge funds and computer driven trading strategies.
When silver prices fall through important technical levels, automated trading systems can trigger stop losses and liquidate positions. When numerous funds respond to the same signals, selling can become concentrated, potentially accelerating an otherwise ordinary correction.
Piepenburg also believes speculative capital has been attracted towards artificial intelligence related equities and other financial assets, diverting money away from traditional safe haven assets.
He estimates that institutional silver selling has exceeded US$1.6 billion, adding to the downward pressure.
However, he questions whether the strength of the US dollar is a sufficient explanation for the weakness in precious metals, particularly given the enormous debt burden facing the United States.
China and the growing importance of physical silver
One of the more interesting developments in the global precious metals market is the increasing importance of China.
Piepenburg points to persistent price premiums for precious metals in Shanghai compared with Western markets. He sees this as evidence of the growing importance of physical demand and China’s ambition to become a leading international centre for precious metals trading.
China has been steadily developing its position in the global gold and silver markets, with a greater emphasis on physical transactions and domestic supply.
This raises an important question for investors: could the centre of precious metals price discovery gradually shift away from traditional Western futures exchanges towards markets where physical metal plays a greater role?
If physical premiums remain elevated in Asia while Western paper prices are under pressure, the difference between the two markets deserves attention.
For physical bullion owners, the distinction between the quoted futures price and the actual cost of acquiring available physical metal is particularly relevant.
The bigger issue: Government debt and currency debasement
Beyond short term trading activity, Piepenburg believes the most important factor supporting precious metals is the growing global debt problem.
Governments across the developed world are carrying enormous debt burdens. Higher interest rates increase the cost of servicing that debt, placing additional pressure on government budgets and financial systems.
He expects heavily indebted nations to eventually face difficult choices as bond yields rise and refinancing becomes more expensive.
In his view, governments and central banks will ultimately be forced towards lower interest rates, increased liquidity and further money creation to support their financial systems.
He believes this shift could become increasingly apparent by 2027.
History provides several examples of central banks moving from tighter monetary policy towards emergency liquidity measures when financial conditions become unstable.
The periods from 2018 to 2020 and 2022 to 2024 demonstrate how quickly monetary policy can change when financial stability becomes a priority.
Piepenburg argues that the long term consequence is currency debasement, which strengthens the monetary case for owning precious metals.
Why physical silver owners should look beyond the daily price
For investors holding physical silver, there is an important distinction between temporary market volatility and the longer term reasons for owning the metal.
Silver is not simply a precious metal. It is also an important industrial commodity, with demand from electronics, solar technology, electrification and other industrial applications.
This combination of monetary and industrial demand gives silver a unique position in the global commodities market.
Unlike paper contracts or financial products linked to silver prices, physical bullion represents direct ownership of the metal itself.
This distinction becomes particularly relevant during periods of market stress, when investors may begin paying closer attention to the availability, premiums and delivery of physical metal.
At FirstGold, we believe understanding the difference between owning physical bullion and having exposure to a paper price is an important part of precious metals education.
Investors should understand exactly what they own, how it is held, where it is stored and whether they have direct ownership of the underlying metal.
Could silver be preparing for another major move?
Piepenburg remains firmly bullish on silver despite its recent correction.
He believes that if concentrated short positions are reduced, physical demand continues to strengthen and price discovery becomes increasingly influenced by Asian markets, silver could experience another substantial upward move.
His expectation is that the next major bull market could be considerably stronger than the gradual advances seen in previous cycles.
While his outlook is a market forecast rather than a certainty, the broader issues he raises deserve consideration: global debt, currency purchasing power, physical supply, industrial demand and the growing role of precious metals in international markets.
The important point is that short term price movements do not necessarily change the underlying fundamentals.
As Piepenburg puts it, silver may ultimately benefit regardless of whether the pressure comes from rising interest rates, falling confidence or further currency creation.
FirstGold: Building ownership of physical precious metals
At FirstGold, our focus is on helping Australians accumulate genuine physical gold, silver and platinum bullion.
We believe physical ownership deserves serious consideration in a world where government debt continues to expand, currencies face long term purchasing power challenges and financial markets are becoming increasingly complex.
Rather than trying to predict every market movement, investors can consider accumulating physical bullion progressively, using a cost averaging approach to build their holdings over time.
FirstGold allows customers to purchase physical precious metals from relatively small amounts, with holdings accumulated until they are ready for collection or redemption under the applicable arrangements.
You do not need to buy an entire ounce of gold or a kilogram of silver to get started. You can build your physical bullion holdings one gram at a time.
Explore physical gold and silver ownership at www.firstgold.com.au.
FirstGold provides access to physical precious metals and educational information. This article discusses the opinions and market forecasts of Matthew Piepenburg and should not be interpreted as financial advice or a guarantee of future silver prices. Precious metals prices are volatile and can rise or fall.
