TD Securities‘ strategic bet against silver backfired spectacularly this month as the metal’s price surge past the bank’s stop-loss level, potentially costing the firm millions on a trade that anticipated a 50% price collapse.
The Canadian investment bank entered a short position in March silver futures at $78 per ounce on January 7, targeting a decline to $40, according to a commodities model portfolio report released that day. TD set a stop-loss at $92.50 per ounce to limit potential losses.
Silver surged past $92 per ounce by January 15, hitting $92.46 and triggering the stop-loss. The metal has climbed approximately 18% since TD opened the position one week ago.
The timing proved disastrous. China implemented strict export controls on silver effective January 1, six days before TD’s trade. The new licensing system requires government approval for all silver exports and limits eligibility to state-approved companies, replacing a quota system that operated since 2000.
China controls between 60% and 70% of the global refined silver supply, according to market analyses. The export restrictions created an immediate supply shock that TD’s analysis failed to anticipate.
The bank’s January 7 report predicted that “large-scale selling activity” from commodity index rebalancing would drive prices down. TD attributed the rally to liquidity constraints rather than fundamental supply issues, noting retail ETF inflows reached only 35 million ounces compared to 130 million ounces during the 2021 silver squeeze.
That assessment proved wrong. Physical silver markets tightened dramatically after China’s export controls took effect. Buyers in China and India offered premiums of $8 to $10 above spot prices to secure metal, according to mining executives.
Inventories at the London Bullion Market Association declined nearly 40% since 2021, creating vulnerability to supply disruptions. COMEX registered inventories fell approximately 70% since 2020.
The Federal Reserve controversy added fuel to silver’s rally. News emerged on January 13 that Chair Jerome Powell faces a criminal investigation related to testimony about the Fed’s headquarters renovation, spurring safe-haven demand.
TD’s short position contradicted the bank’s broader precious metals outlook. Daniel Ghali, director of commodities strategy at TD Securities, told BNN Bloomberg on Jan. 13 that gold remains well-positioned to benefit from dollar weakness, though he did not address the silver trade.
The bank forecast in December that gold would reach $4,400 per ounce in the first half of 2026 while silver would retreat to the mid-$40 range. Gold has climbed above $4,600, while silver moved in the opposite direction of TD’s prediction.
Silver has surged approximately 200% since early 2025, breaking above $90 per ounce for the first time in history. The metal traded around $30 per ounce at the start of 2025.
Related: US Mint Warns of Pricing Changes as Silver Hits Record $90 Per Ounce
Investment analysts now project silver could reach $100 per ounce or higher in 2026. Ned Naylor-Leyland of Jupiter Asset Management told CNBC that reaching the $100 milestone was “absolutely” possible this year based on market fundamentals.
The global silver market has operated in a structural supply deficit for five consecutive years. The cumulative shortfall since 2021 exceeded 900 million ounces, roughly equivalent to one year of global mine production, according to data from the Silver Institute.
Industrial demand from photovoltaic manufacturing, artificial intelligence infrastructure, electric vehicles, and semiconductor production has intensified pressure on supplies. The United States designated silver as a critical mineral in November.
TD Securities has not issued public updates on the trade since the original January 7 report. The bank has yet to comment on whether the position was stopped out or if losses were realized.
Related: Silver, not gold, could be the bigger 2026 swing
The silver-to-gold ratio has narrowed to its tightest levels since the early 1980s as silver’s outperformance accelerated, marking one of the most dramatic moves in precious metals markets in decades.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
