All Eyes on Shanghai: Silver Rally Driven by China

As silver prices continue soaring to new all-time highs, mainstream commentary focuses on the COMEX/London price and not the Shanghai price. But it should now be clear to nearly everyone that, at least as of January 2026, it's the daily action in Shanghai that is determining the day-to-day price moves.

China's 2026 Silver Export Controls: A Key Catalyst

And what kicked off this event? Back in October of last year, the Chinese government announced plans for export controls on many critical and industrial metals, including silver. Here's an old link from the U.S. financial network CNBC. The export controls then went into effect on January 1. Here's a Google AI summary of the news:

China's 2026 Silver Export Licensing Policy Overview

Silver Price Action Post-Export Controls

And now check the chart of the silver price with arrows denoting when the export controls were announced and when they went into effect:

Silver Daily Price Chart Reflecting Policy Impact

Specifically, let's look at the price action thus far in January:

Silver's January Surge on 2-Hour Chart

As such, it's pretty easy to conclude that the Chinese export controls have set off a massive rally in silver, with price having more than doubled since the controls were announced last October. Even as I type this on Monday, January 26, the COMEX price continues to follow Shanghai.
• Thursday, January 22: Shanghai $104, COMEX $94.
• Friday, January 23: Shanghai $112, COMEX $102.
• Monday, January 26: Shanghai $123, COMEX hits $117.

Misguided Speculation Claims: What the Data Really Shows

Mainstream analysis and commentary continues to frame the silver price rally as some sort of speculative blow-off top. But that's just lazy reporting from supposed "experts". As we wrote last week, the overall speculative positions in COMEX silver are shrinking, not soaring. Instead, much of this rally is being driven by the Swap Dealer and Producer/Merchant categories of the Commitment of Traders report. Below is the most recent summary, taken from the survey of Tuesday, January 20, at the end of a reporting week that had seen the price of silver rise by $8.30.

COT Report Reveals Commercial Buyers Driving Rally


Look closely at what you see above and note:

• The Large Speculator category SOLD 4,372 longs and added 2,474 new SHORTS. That's NET SELLING of 6,846 COMEX silver contracts.

• On the disaggregated report, see that the Managed Money category saw selling of 2,187 longs and an addition of 1,659 shorts.

• Even the little guys—the Non-Reportable Positions—saw 2,057 contracts of net selling.

• Opposite of that, the Commercial category ADDED longs and COVERED shorts.

• Specifically, the Producer/Merchants nearly doubled their long position while covering 3,689 shorts and the Swap Dealers reduced their NET short position by 3,148 contracts too.

So again: What you're seeing on COMEX is NOT a massive speculative binge nor is it some sort of Hunt Brothers attempt to corner the market. Instead, Speculators are getting duped into being short while the usual shorts—The Commercials—are getting squeezed and are adding longs.

Putting it all together, we're back to the thesis of this post. The rally in silver is NOT a western-driven speculative bubble. Instead, it's a rally that's emanating from China on very real physical supply concerns, and as long as those concerns remain, the rally should have staying power.

Now, of course, nothing moves straight up forever and there will always be sharp pullbacks in price. However, as long as the Shanghai price keeps moving higher, it's almost a certainty that the COMEX price will tag along, squeezing Banks and any other trading entity that foolishly bets against the silver price during this historic rally. Browse gold investment options today!