Silver Supply Tightens as COMEX Stockpiles Drop 22% Since September
COMEX silver inventories are shrinking at an accelerating pace, adding fresh tension to an already tight physical market and reinforcing signs that a silver short squeeze is unfolding.
- COMEX silver inventories have dropped to around 415 million ounces, the lowest since March 2025.
- Total stockpiles are down roughly 22 percent from the September peak, signaling strong physical demand.
- Shrinking inventories are increasing pressure on short sellers, reinforcing short-squeeze dynamics in the silver market.
Silver inventories held in COMEX-approved warehouses have fallen by roughly 34 million ounces from recent highs, dropping to about 415 million ounces. This marks the lowest level since March 2025 and highlights how quickly available supply is being drained from the system.
The longer-term picture is even more striking. Since peaking in September, total COMEX silver stockpiles have declined by approximately 117 million ounces, representing a drop of around 22 percent in just a few months. The pace of these withdrawals suggests that physical demand is not only persistent but intensifying.
Physical demand squeezes futures market
Falling inventories typically signal that metal is leaving warehouses for delivery, industrial use, or long-term storage rather than being replenished. In silver’s case, this trend is creating growing stress for traders holding short positions in the futures market.
Short sellers are obligated to deliver physical silver if contracts move into delivery, but as warehouse stocks shrink, sourcing actual metal becomes more difficult and more expensive.
When available supply tightens, sellers demand higher prices, forcing shorts to either secure silver at a premium or close positions at a loss.
Why silver is diverging from gold
Recent data also shows silver inventories declining faster than gold’s, a notable divergence. While gold often dominates headlines as a safe-haven asset, silver’s dual role as both a monetary metal and an industrial input means physical demand can tighten suddenly when investment flows and industrial usage overlap.
This imbalance leaves silver particularly vulnerable to sharp price moves when inventories fall and futures positioning becomes crowded on the short side.
Short squeeze dynamics build momentum
As prices rise due to physical scarcity, additional short positions come under pressure. This creates a feedback loop: higher prices trigger forced buying, which further tightens supply and pushes prices even higher. With COMEX inventories continuing to fall, market conditions remain primed for volatility.
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Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
