AI Overview
Bullion dealers are already influenced by the Shanghai silver price, as it's a major global hub; the key isn't if, but how much influence it has, especially with recent high volatility showing discrepancies between Western (COMEX) and Eastern (Shanghai) markets, leading to discussions about price convergence as traders adjust to real-world supply/demand and potential shifts from paper to physical markets.
Current Situation & Dynamics
Market Integration: The Shanghai Futures Exchange (SHFE) is a huge player, and its prices are already factored in by sophisticated dealers, often through arbitrage, but sometimes discrepancies create significant price gaps.
Recent Volatility: In late 2025, reports highlighted major price differences (e.g., Shanghai silver near $73 when COMEX was lower), signaling a potential shift or market correction.
Dealer Reaction: Dealers are closely watching this divergence; some expect a bullish 2026, with increased focus on physical demand and potential price catch-up in Western markets.
What to Expect
Increased Adoption: Expect more emphasis on the SHFE price as physical demand (especially from Asia) grows and Western markets grapple with supply issues and industrial needs.
Focus on Physical: The large price differences highlight the disconnect between paper (COMEX) and physical markets, pushing dealers and investors towards real-world supply/demand, often represented by Shanghai prices.
Future Price Convergence: As markets balance, expect prices to align, potentially driving Western prices up to meet the higher Shanghai levels or vice versa, but current sentiment favors higher prices.
In essence, the Shanghai price isn't a future event for dealers; it's a current reality they're navigating, with many anticipating increased significance and price action in 2026.