The silver market is facing an inventory crisis. Visible above-ground stocks have been drawn down relentlessly as four consecutive years of structural deficits have consumed deliverable metal. COMEX registered inventories—metal that can be delivered against futures contracts—are down approximately 70% from their 2020 peak, a decline that has accelerated since the start of 2025.
LBMA vault holdings, which represent the London over-the-counter market’s physical silver, have fallen roughly 40% since 2020. The drawdown reflects both physical offtake by industrial users and financial demand from ETF investors. In Shanghai, the third major storage hub, inventories have also declined as Chinese industrial demand absorbs available supply.
The inventory drawdown has implications for futures market mechanics. With registered COMEX stocks at minimal levels, the risk of a delivery squeeze in the silver contract increases. Market participants have already observed periodic backwardation in the futures curve, where spot prices trade above deferred months, signaling near-term physical tightness.
Analysts remain constructive on silver pricing despite the pullback from triple digits. Most forecasts cluster in a $55–$70/oz base range for 2026, with upside scenarios extending to $100–$150/oz if the inventory situation worsens and industrial demand continues to grow. The gold-to-silver ratio, currently near 62:1, suggests silver is historically undervalued relative to gold.
The inventory crisis in silver has direct implications for procurement. Spot availability of large-volume bars is becoming constrained, with delivery premiums rising. Buyers should evaluate warehouse receipt financing or forward delivery contracts rather than relying on spot market purchases. The risk of a COMEX delivery squeeze is real and would spike prices rapidly.