A shortage of physical silver in Dubai is pushing investors to pay significant premiums as demand surges and stocks at major trading outlets run dry, according to bullion traders and market sources.
Silver is currently trading at around Dh16,600 per kilogram, but buyers eager to secure physical bars are reportedly paying premiums of up to Dh2,000 per kilogram to lock in available stock. Traders say supplies are being snapped up almost as soon as they arrive, with some investors purchasing immediately rather than waiting for potential price corrections.
“Stocks are extremely tight,” traders said, noting that deliveries are struggling to keep pace with rising demand. “When silver becomes available, buyers move quickly – many are not willing to wait even a few hours.”
Market participants attribute the surge in demand to a combination of rising global silver prices, growing interest in hard assets, and expectations that prices could climb further. Silver’s dual role as both an investment metal and an industrial commodity has also added to its appeal, especially amid global economic uncertainty.
The shortage in Dubai mirrors trends seen in other global bullion hubs, where investors are increasingly favouring physical metals over paper-backed products. Unlike gold, silver’s lower price point makes it more accessible to retail investors, further fuelling demand during periods of market volatility.
Traders also point to supply-side constraints, including limited refining capacity and slower international shipments, which have tightened availability in local markets. As a result, premiums are becoming a key factor in final pricing, particularly for larger bars.
Despite the higher costs, buyers appear undeterred. “People are buying based on availability, not just price,” traders said. “There’s a fear that if they don’t act now, the metal won’t be there later.”
Analysts say silver’s momentum could continue in the near term, especially if inflation concerns persist and investors seek diversification beyond traditional assets. However, they caution that volatility remains a feature of the silver market.
For now, Dubai’s silver market remains firmly in sellers’ hands – with availability, rather than headline price, driving buying decisions.
