Silver inventories at COMEX warehouses have significantly decreased to 415 million ounces, the lowest level since March 2025. This represents a reduction of 34 million ounces, with a total decline of approximately 117 million ounces, or 22 percent, over recent months. The drop indicates increased physical demand for silver, particularly as short sellers face challenges in acquiring the metal to fulfill their futures contracts. Short sellers, who sell silver hoping to repurchase it at lower prices, are now forced to pay higher prices set by sellers when unable to obtain the required silver. This dynamic drives silver prices up, compelling more traders to buy silver to avoid losses, thereby tightening the market further. This phenomenon, known as a silver short squeeze, is currently intensifying.
COMEX, part of the New York Mercantile Exchange, is a major global hub for trading precious metals including silver and gold. Fluctuations in silver prices generally depend on global economic conditions, industrial demand, and investment trends. The rise in physical demand is largely driven by uses in electronics, photography, and other industrial applications, contributing to declining inventories. Experts warn that if this trend continues, silver prices may rise further, posing challenges for both investors and industries. Moreover, the ongoing short squeeze could increase market volatility, requiring traders to exercise caution.
