Silver: Comex and LBMA are Casinos not the Market

Collapse of COMEX and LBMA Price Discovery

COMEX is Commodity Exchange, Inc. and LBMA is London Bullion Market Association. These are supposed to be trading platforms for metals like Silver and bullion.

COMEX is a futures exchange. For trading actual possession of metal is not required but upfront margin must be paid.

When a long does demand delivery, what they receive is not metal in hand, but a warehouse warrant for a standard COMEX-approved bar stored in an approved vault. Actual physical withdrawal requires additional steps, fees, time, and cooperation from the vaulting system.

The London bullion system is coordinated by the London Bullion Market Association. It issues the “receipts of advance booking of silver” through electronic tokens on the OTC Bullion System. For all practical purposes it is like futures market trading.

For buyer it is called Buyer’s instrument: unallocated bullion credits and forward claims and for seller it is called Seller’s obligation: a bullion liability (not a warehouse obligation).

This is not the same as a warehouse receipt because a genuine warehouse receipt (like in regulated Indian commodity markets), refers to a specific lot that is stored in a specific vault, and date of delivery of metal.

Seller is usually a bullion bank who may actually own the Silver but also one who is creating a short position. In other words speculation is permissible.

COMEX, (New York) and LBMA, (London) were historically two markets which used to decide the prices of Silver in the world. Comex has been trading in Gold and Silver since 1970 and LBMA since 1987. Historically UK used to decide the price of metal from the time of its Empire and it remained relevant in price discovery till a month ago.

As of today these Exchanges effectively crashed as they are neither reflecting real price of Silver nor are in a position to give delivery of metal.

There are two regulators. Financial Conduct Authority which is like SEBI of India and Bank of England which is like Reserve Bank of India. Both were found wanting.

The CME Group (which runs COMEX) just raised silver margins by 47%, a move analysts call a “Kill Switch” to stop small traders from buying, essentially protecting the big banks who are trapped in short positions. This should have been done earlier when the volume spiked and prices broke the range.

Silver Squeeze of 2026

For years global silver demand (especially from industrial uses like solar, electronics, electric vehicles, and tech applications) has outpaced mined and recycled supply.

Futures and ETF contracts sometimes represent claims on silver that exceed what exists in vaults. In normal times this doesn’t break the system because not everyone asks for delivery of physical metal.

But in 2026 situation was abnormal and regulator permitted huge built up of paper positions impossible to meet with actual delivery of Silver. Price discovery that is not enforced by delivery eventually collapses into betting. Commodity exchange becomes a Casino for wagers. This is what happened.

Large institutional traders in the West are sitting on massive short positions (betting the price will go down). However, since there is no physical silver left to deliver, they are facing a catastrophic “short squeeze” where they might be forced to buy back silver at triple-digit prices ($100+)

If COMEX is forced into “Cash-Only” settlements because they have no metal, it proves they are no longer a “Bullion Exchange” but a “Casino.” This is the moment the IIBX steps in as the new global benchmark.

The credibility does not come back by regulation or reassurance. It only comes back if metal, not margins, is allowed to decide. Let’s consider what is happening in India.

No Seller in IIBX.

IIBX or India International Bullion Exchange in Gift City, Gujarat has no trading due to huge price divergence. There is no seller for silver. It means the real price of silver is higher than what even IIBX is offering, otherwise a seller would appear.

MCX is India’s futures market and today the price of silver is Rs. 310,000+ per Kg or $107+. This is substantially higher than about $90+ in COMEX and LBMA. It is apparent that Western traders try to suppress the price with paper derivatives, the physical premiums in India are skyrocketing.

Price discovery requires two things simultaneously: a buyer and a seller willing to transact at a visible price. That condition no longer holds. COMEX and LBMA still trade because leverage forces people to transact, not because metal is available. IIBX prints closes because it must publish something, but it is only echoing the last bid. MCX trades, but at prices that are already being overtaken by the off-screen physical market. The physical market itself has moved to the final stage that is refusal to quote. Bullion dealers are not selling anymore.

UAE and Silver

UAE imports raw silver from around the world, “processes” it slightly to meet Rules of Origin, and flushes it into India.

The UAE is like the “Trading Company” that buys raw silver from Africa and Peru, refines it to 999 purity, and delivers it to GIFT City. Under the India-UAE CEPA, the duty on silver is currently down to 8% (compared to the standard 15%), and it is dropping every year toward zero.

MBZ Visits India:

UAE is the third largest refiner of Silver in southern hemisphere after China and Australia. President MBZ made a sudden visit to India, yesterday.

A refiner’s visit means several things. First, they are exploring direct supply corridors that bypass London-style credit chains. Second they are assessing how much Indian demand can absorb without a visible price signal.

Third and most important one is that they do not want a piracy on them or their trade like that which is happening on oil, elsewhere. All are strategic questions which are not asked in a functioning market.

Thus, this silver angle is possibly, the “stealth” economic driver of the visit. While the world focuses on Gaza or oil, the Silver Squeeze of 2026 has created a massive financial dependency between the UAE and India that bypasses Western markets entirely.

The “Silver Divorce” between the East and West has officially begun. If COMEX and the LBMA cannot prove they have the physical bars to back their paper contracts, their decades-old monopoly on price discovery will indeed vanish.

By positioning the UAE as a “Strategic Investor” and primary supplier to IIBX (GIFT City), MBZ has effectively moved the world’s silver vault from London/New York to the Gujarat coast.

India’s 2026 target of 100GW solar power and the new SMR (Small Modular Reactor) nuclear deal with the UAE (signed yesterday) both require massive amounts of silver for specialized components.

Over the last week (mid-January 2026), reports have confirmed that Turkey is in advanced talks to join the existing Saudi-Pakistan Defense Pact (signed in Sept 2025). This pact includes a “collective defense” clause that is an attack on one is an attack on all. With Qatar and Egypt also being linked to this grouping, the UAE finds itself increasingly isolated from its traditional Sunni allies. MBZ sees this “Sunni Bloc” as a potential threat to UAE’s independent foreign policy, especially given their friction with Saudi Arabia over Yemen.

Thus, MBZ’s sudden arrival in Delhi was not a routine check-in. It was a high-stakes move to secure a security umbrella from India as regional lines harden.

The documents, released by the Ministry of External Affairs (MEA) and PIB Delhi, show that MBZ and PM Modi have bypassed the traditional Western-led security architecture to create a “de facto” strategic alliance in the Arabian Sea. By integrating the UAE into India’s nuclear and defense manufacturing ecosystem (the new Strategic Defence Partnership), India is providing a “Silent Guarantee.” If the Saudi-Pakistan axis tries to squeeze the UAE, they are now squeezing a primary strategic partner of a nuclear-armed India.

Silver Security

By stockpiling 25% of the world’s supply, India and the UAE have essentially “cornered the physical market.” When the Western short-sellers are forced to deliver physical silver they don’t have, they may have to come to GIFT City or Dubai to buy it, at whatever price India and the UAE decide.

India and the UAE are essentially decoupling the physical price of silver from the “paper price” set in New York.

We are currently witnessing a historic regime change in the silver market, and MBZ’s visit was likely the final coordination before the “paper game” in the West collapses.

Soon we shall talk about the flip that has happened. Why MBZ has effectively converted the UAE from a Western-protected Gulf monarchy into an Indian-protected global trading hub. He gave the West the “cold shoulder” and gave India the keys to his future.

There are interesting stories to tell, which I will share soon.