The recent silver correction might have been the largest in history, yet it has not done much to reduce the interest in the metal. Instead of forcing traders out of their positions, demand for physical metal appears to remain intact.

However, the tension between the paper and physical market has to be resolved. Open interest declined from roughly 110,000 contracts in early December to about 76,000 in March. Still, that level is historically large enough to cause problems if too many holders demand physical delivery.

The price dynamics themselves have also created an unintended consequence. Lower prices, instead of easing stress on the system, tend to encourage buyers to accumulate more silver while it appears cheap.

As the Sirius report recently noted, when a commodity is already in shortage, pushing prices down simply prompts more participants to "pile in and buy as much as they can because it's even cheaper."

Furthermore, with assets like equities, commodities, and crypto moving down in lockstep recently, Sirius ...