As of May 2026, COMEX silver faces a critical supply crunch, marking a sixth consecutive year of structural deficits with rapidly depleting "registered" inventories. High demand for physical delivery is causing significant backwardation, with massive, accelerated outflows of metal from vaults creating extreme pressure on upcoming contract expirations. [1, 2, 3, 4]
The economy
- Thread starter Rastafarian
- Start date
COMEX resolves physical silver inventory deficits during contract expirations primarily by converting "eligible" silver to "registered" status, encouraging contract rollovers, increasing margin requirements, and ultimately utilizing cash settlement options when physical supply cannot meet demand. Despite high paper-to-physical ratios, crises are often managed by importing external silver to replenish vaults. [1, 2, 3, 4, 5]
As of early 2026, China has tightened its control over the global silver supply, implementing new export restrictions and increasing domestic stockpiles to meet surging demand for solar panel manufacturing and electric vehicles (EVs). China controls 60-70% of global silver refining and is both a major producer and consumer.
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Nothing could have been done to prevent this and it’s also Bidens fault
Really interesting market with crude and rates supporting the USD petrodollar, with inflation and uncertainty forcing the bond vigilanties to keep rates elevated. The FOMC and treasury have a mess on their hands.
imho, gold will trade inverse to the USD index without a ramp up in liquidity from the treasury via FOMC
The situation with silver vs gold is very different with the industrial applications for silver that are increasing against a multi year decrease in supply.
With China the big player in the silver market for supply and demand, the Trump meeting with Xi will be a big deal for how silver will be trading short term
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The best liquidity I see to trade silver short term looks like AGQ, the ProShares Ultra Silver which is about a 160% play on the trading month held futures price.
66% of the fund is in the July futures contract currently
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Will add to PAAS soon
Not trading the silver futures due to liquidity, but any drop out of the Trump Xi meeting will add to PSLV holdings
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