Silver Price Meltdown Sparks Buying Frenzy And Supply Chain Breakdown

(Mike Maharrey, Money Metals News Service) On Tuesday, February 3, host Chris Marcus brought Stefan Gleason back to Arcadia Economics after the prior Friday’s historic silver meltdown.

Stefan Gleason is the President and CEO of Money Metals Exchange, one of the largest online precious-metals dealers in the United States. He also runs the Money Metals Depository in Idaho, a Class 3 vaulting operation that stores, buys, and sells physical gold and silver at scale.

In other words, Gleason sits where retail demand meets real-world supply chains, and he sees the stress fractures before most investors even notice them.

That is why his perspective matters when a meltdown turns into a buying frenzy. The chart move is only the surface. Underneath it are order surges, fulfillment bottlenecks, staffing strain, refinery backlogs, and widening spreads that punish emotional decision-making. Gleason’s authority on the topic comes from operating through those conditions, not commenting on them from a distance.

In this episode, he described Friday’s action as “absolute pandemonium,” followed by an exceptionally busy weekend.

The silver meltdown did not kill momentum. It ignited retail pandemonium and pulled in new buyers who thought they missed the runup, then rushed in when the correction hit.

The buying frenzy intensified fast enough to expose weak links across the supply chain, from dealer fulfillment to refining capacity, and it set the tone for what both men warned could be an even more volatile stretch ahead.

Who Bought And Sold As Silver Whiplashed From $120

Marcus asked who bought into the whiplash and who sold into it. Gleason said the whiplash brought action from both directions. Some longtime holders sold, not to abandon their positions, but to take profits into the run. Others used the setback to buy more.

He emphasized that the most important shift was the flow of new buyers entering the market in large numbers. He said the physical metals industry is small, so even a modest uptick in participation can strain the dealer network and make whiplash effects worse in pricing, premiums, and fulfillment.

Money Metals Hired 70 Staff As Orders Flooded In

Gleason said orders flooded in so fast that Money Metals had to prioritize execution over marketing. He described a surge that required hiring at speed, including around 70 new staff, while still needing more capacity to handle the demand.

He said this flood is not just about packing boxes. It involves training, verification, and quality control that cannot be rushed. The operational challenge, he explained, is processing a rising tide of high-value metal while maintaining accuracy and security through every step.

Mainstream Still Late Despite Explosive Metals Moves

Marcus raised the question of whether explosive moves finally pulled the mainstream in. Gleason said the mainstream remains late, even with explosive price action dominating headlines. He argued that most people still do not own physical gold or silver and are not actively managing their finances at a level that would lead them into hard assets early.

He also said explosive moves can create a self-reinforcing cycle. People who believed they missed their chance at higher prices saw the pullback and rushed in. That helped keep buying pressure alive even as volatility frightened some observers away.

Inflation, Rate Cuts, And Financial Repression Drive Hard Assets

Marcus pointed to inflation pressures and the market pricing in rate cuts. Gleason argued that the combination of inflation and rate cuts is exactly what drives hard assets. He said the system is built to manage the debt burden and that negative real rates amount to financial repression that harms savers.

In that environment, he described hard assets like gold and silver as financial insurance. He also noted global demand dynamics, arguing that Asia and central bank accumulation have been key forces behind the broader move, even before U.S. retail interest fully wakes up.

Junk Silver Glut Forces Prices Below Spot

Gleason described a junk silver glut as a major part of the current dislocation. He said 90% coinage silver flooded the market at the same time the refining system became overwhelmed, forcing junk silver prices below spot.

He explained that the glut persists because 90% silver is not .999 fine silver, so it cannot easily be turned into popular bullion products without refining. When refining backlogs grow, a glut can deepen and keep prices below spot until the bottleneck clears or demand shifts toward that specific category.

Refinery Backlogs Break Local Dealers’ Cash Flow

Marcus asked why refinery backlogs matter to retail customers. Gleason said refinery backlogs break the cash flow cycle that many local dealers rely on. He explained that scrap and coinage sellers typically ship material to refineries and receive advances that let them keep buying.

When refineries stop advancing cash and extend turnaround times, local dealers lose a key funding mechanism. That pushes bids down, widens spreads, and reduces liquidity. Gleason said the cash flow squeeze is one reason selling certain forms of silver can feel unusually punitive in the current market.

Wider Spreads Make Physical Silver A Bad Trading Vehicle

Gleason said wider spreads are a warning sign for anyone tempted to treat physical silver like a trading vehicle. Each time you cross the bid-ask spread, you pay the cost of that spread, and wider spreads make frequent trading far more expensive.

He urged buyers to focus on straightforward bullion items and avoid products with elevated premiums during stress. He used Silver Eagles as a common example where premiums can rise fast, making them a less efficient way to accumulate ounces when spreads and demand are both rising.

Why Cheap Junk Silver Still Sits Unsold

Marcus asked why cheap junk silver does not get snapped up when it is priced below spot. Gleason said the answer is that many new buyers do not understand junk silver and do not want complexity. They want something new, shiny, and easy to price.

That lack of understanding keeps cheap junk silver sitting longer than expected, even when it is the bargain product on paper. Gleason said this is a demand mismatch, not proof that silver itself is unwanted. It is one more distortion created by a market expanding faster than education can keep up.

China Premiums, Comex Drawdowns, And Silver Leaving America

Marcus highlighted China premiums and COMEX drawdowns as signs of tightness outside the U.S. Gleason said China premiums can pull physical silver across borders, especially given the concentration of refining capacity in Asia, though doing business overseas introduces new risk and friction.

He also described how dislocations can accelerate COMEX drawdowns when the financial incentive to move metal becomes large enough. Gleason said he had seen silver leaving America when demand and financing pressures abroad made time valuable and premiums attractive.

Silver Act Could Expand Comex Vaults Beyond New York

Gleason said a Silver Act could become a major story next, because it targets geographic concentration in the COMEX vault network. He described systemic risk in having COMEX-linked depositories clustered around New York and said the bill would push for vault expansion into other regions.

He said vault expansion could improve system integrity, resilience, and logistics by allowing more locations to support COMEX delivery. He also noted that significant silver stockpiles exist in depositories outside the exchange system, and that expanding vault access could bring more of that metal into the deliverable network.

What Sellers Can Expect In Today’s Chaotic Market

Marcus asked what sellers should expect if they need to sell during a chaotic market. Gleason said bids were weak but improving, and he emphasized that chaotic conditions widen spreads and can lead to disappointing offers, especially for products like junk silver.

He said some categories were seeing bids rise as buying began to dominate again. Still, he cautioned against selling into chaos unless necessary, since spreads can narrow as backlogs ease and the market finds its footing.

Inventory, Shipping Backlogs, And A Copper Premium Warning

Gleason said Money Metals was dealing more with shipping backlogs than inventory shortages, even as some competitors showed signs of product delays. He described the backlogs as driven by the physical workload of processing inbound metal, including testing and quality control, before inventory can be resold.

He also issued a copper premium warning. He said copper rounds and bars often carry fabrication premiums that are hard to justify relative to the underlying metal, and suggested copper pennies or paper exposure for those who want copper without paying extreme premiums.

Money Metals Vault And Loans Put Liquidity In Reach

To close, Gleason described Money Metals Exchange as a large dealer and depository based in Idaho, operating since 2010. He highlighted the company’s vaulting capabilities and said the firm offers a revolving line of credit against customer metal held in segregated storage for business purposes.

Marcus wrapped by calling the interview a master class and thanked Gleason for sharing a clear picture of what the silver price meltdown has unleashed. Gleason’s final point tied back to the title’s theme. A meltdown can spark a buying frenzy, and when it does, it exposes every weak link in the supply chain.

Stay connected with Chris Marcus and Arcadia Economics HERE.