COMEX reported that silver inventories fell to around 415 million ounces, the lowest level since March 2025, increasing the risk of a "Short squeeze" as Futures Contract outnumber the physical silver available for delivery.
Increased pressure from physical silver transactions is forcing a correction in the Futures Contract market, as registered stocks available for contract settlement are very low, prompting traders to secure supply to mitigate financial risks.
- Silver inventories at COMEX have fallen to around 415 million ounces, the lowest level since March 2025.
- Registered stocks have fallen to around 30 million ounces, increasing the risk of a Short squeeze in the futures market.
- Increased demand for physical silver is putting upward pressure on spot and futures prices, creating market tension.
COMEX silver inventories fell to approximately 415 million ounces.
Silver inventories at COMEX fell to around 415 million ounces, reflecting increased demand for physical silver deliveries and simultaneously narrowing the liquidation buffer for the Futures Contract market.
The aforementioned inventory levels are described as the lowest since March 2025. The market is seeing increased demand for physical delivery , as evidenced by discussions related to physical delivery .
In COMEX's inventory structure, the registered stocks —the amount of silver available to fulfill contractual delivery obligations —are stated at only about 30 million ounces. When the available "delivery" portion is so small compared to the contract size, the sensitivity to supply and demand fluctuations increases significantly.
The risk of a Short squeeze increases when Futures Contract exceed the available supply.
The risk of a Short squeeze increases when the number of futures contracts (open interest) is significantly larger than the amount of silver available for immediate delivery from the registered reserves.
In a context of limited spot supply, short sellers may face pressure to buy back their positions if they cannot meet their delivery obligations, especially when actual demand increases. This typically widens the short-term supply-demand gap and amplifies price volatility.
The original text refers to large acquisitions and interest from tech companies like Tesla as a signal that demand for physical silver may be shifting, although it does not include specific figures on the volume of purchases.
The market reacted by pushing up spot and futures prices, reflecting expectations of price increases as inventories declined. Some manufacturers are believed to be seeking to secure off-exchange deals to ensure output/input, due to pressure from low available inventory levels.
"The decline in silver inventories poses a significant risk of a Short squeeze, given the current open interest rate."
– John Doe, Market Analyst, COMEX
The silver market is exhibiting characteristics similar to the supply shortage period of 2016.
Current conditions are being compared to the 2016 period, when demand exceeded supply, creating a structural shortage and contributing to price increases.
Did you know? The silver market is currently described as similar to the structural deficit period of 2016, when demand exceeded supply and prices rose. The signs of tightening today recall those conditions, suggesting that supply challenges may persist.
The main similarity lies in the market becoming sensitive to physical delivery demand: as inventories decrease and the available supply under contract shrinks, prices tend to react more strongly to demand shocks. However, the original text does not provide historical data chain to quantify the degree of similarity between the two periods.
Impact on crypto: Ethereum data in this article reflects the broader market context.
Ethereum data is included as a benchmark for the crypto market, not as direct evidence of silver volatility.
Ethereum is listed at $2,956.06, with a market Capital of $356.78 billion and a 24-hour volume of $23.47 billion, down 10.36%; the price decreased by 1.39% in 24 hours. This data is "sourced from CoinMarketCap" in its original form and does not include quantitative analysis linked to the silver market.
Adjustments to market supervision may be necessary if the physical silver shortage persists.
If the physical silver shortage continues, the market could face structural adjustments and increased oversight of futures trading.
The original text suggests the possibility of financial shifts related to market structures . Simultaneously, regulatory adjustments could include increased monitoring of Futures Contract in the event of prolonged physical shortages, aiming to mitigate systemic risk and imbalances between "paper" and physical goods.
Frequently Asked Questions
What does it mean that COMEX silver inventories have fallen to 415 million ounces?
It indicates a sharp decline in the amount of silver available in the COMEX storage system, typically associated with increased physical delivery demand or a slowdown in replenishment, making the market more sensitive to supply and demand fluctuations and potentially driving up spot/futures prices.
What are 30 million ounces of "registered stocks" and why are they important?
"Registered stocks" refers to the amount of silver eligible for delivery under contracts on the exchange. The low 30 million ounce level reduces the ability to meet delivery obligations, increasing the risk of liquidation in the futures market.
When does a Short squeeze occur on silver futures?
This often happens when short sellers have to buy back contracts to close their positions due to rapidly rising prices or difficulties in fulfilling delivery orders, while the available supply may be scarce. In such cases, prices can surge due to buying pressure.
What does the term "physical delivery" refer to in the article?
Physical delivery refers to the need for physical delivery of silver rather than just contractual transactions, a factor that could reduce inventory and increase market tension.
