Silver is trading around $88 after a strong rally this week, moving higher alongside gold as precious metals continue to attract defensive capital. The breakout has already reignited speculation about supply shortages and a potential run toward $100. Now, a new claim circulating on X has added fuel to that narrative.
Financial analyst Tim Hack shared a tweet and chart arguing that escalating cartel violence in Mexico could disrupt global silver production in a way that materially tightens supply. His thesis goes beyond price momentum. It centers on structural risk to physical output.
Mexico’s Dominance and the Supply Risk
The chart shows global silver production by country. Mexico stands firmly at the top, producing roughly 202 million ounces annually; nearly double China and Peru. Combined, Mexico and Peru account for a significant portion of global mined silver, with South America responsible for roughly half of worldwide output.
His argument is direct: if Mexico faces sustained operational disruptions, global supply tightens immediately.
Hack points to cartel violence targeting mining regions, claiming that rising silver prices may be increasing the incentive to pressure producers. In his view, security risks can escalate to the point where mining companies consider suspending operations. Mines can protect facilities, but they cannot fully protect employees off-site. Sustained instability increases operational costs and long-term risk assessments.
If even a fraction of Mexico’s output were interrupted, the global silver market would feel it quickly. Unlike gold, the silver market is thinner and more sensitive to supply shocks. Industrial demand from solar, AI hardware, and electronics has already strained inventories in recent years.
With silver already pushing toward $90, Hack argues that any credible threat to Mexican production could accelerate a breakout toward $100.
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Shortage Narrative and the Squeeze Scenario
Hack’s commentary goes further, linking supply disruption to a broader physical shortage thesis. He questions whether long-term structural tightness in silver inventories could combine with mine disruptions to create what he describes as a “mega squeeze” scenario.
The logic is simple: if paper markets have suppressed price through derivatives and leverage structures over time, a genuine physical shortage would force repricing. A sudden inability to source metal at scale would stress exchanges, refiners, and industrial buyers simultaneously.
Even though such claims remain speculative and controversial, the underlying market reality is clear. Silver’s supply-demand balance is already tight by historical standards. Exchange inventories in key hubs have trended lower, and industrial demand continues expanding.
If Mexico, the world’s largest silver producer, faces meaningful production interruptions, the supply equation shifts immediately.
At $88, the silver price has already entered breakout territory. The $100 level is psychological, but in commodity markets, psychological levels often accelerate momentum once breached.
Whether cartel disruption materializes into a measurable output decline remains to be seen. For now, the combination of rising prices, tightening inventories, and geopolitical risk has placed silver squarely back into the spotlight.
And in a market this tight, it doesn’t take much to tip the balance.
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