Silver Inventories on COMEX Drop Below 80 Million Ounces. What Does It Mean for Silver Prices?

Why It Matters

The inventory squeeze tightens the supply‑demand balance, creating upside price pressure and heightened volatility for both commodity traders and retail investors. It also reshapes the gold‑silver dynamic, making silver a more attractive tactical play amid industrial demand growth.

Key Takeaways

• COMEX registered silver fell to 79.97 million ounces, under 80 million
• Coverage ratio tightened to 15.4%, entering the “stress zone”
• Historical squeezes pushed silver from $72 to $89/oz in May 2026
• Analysts project $95‑$100 per ounce if delivery demand spikes
• Indian MCX price could reach ~₹3.20 lakh/kg (~$3,900)

Pulse Analysis

The recent plunge in COMEX silver inventories to just under 80 million ounces marks a pivotal moment for the metal’s market dynamics. A coverage ratio of 15.4%—the point where physical silver backs fewer than 15% of outstanding paper contracts—places the market in a “stress zone” that historically precedes delivery squeezes. With eligible silver still sitting at 233 million ounces, the bottleneck lies in converting that stock into registered, deliverable metal, a process that can be slow and costly for exchanges.

Price action reflects the scarcity. In May 2026, silver rallied from $72 to $89 per ounce after a similar inventory contraction, and analysts now see the next breakout targeting $95‑$100 per ounce if short sellers are forced to cover. The Gold‑Silver Ratio, a barometer of relative strength, is trending lower, indicating silver’s outperformance against gold. Meanwhile, industrial demand—from solar panels to electric‑vehicle batteries—continues to absorb supply, reinforcing the bullish narrative despite macro headwinds like a firm U.S. dollar and higher interest rates.

For investors, the tightening supply chain offers both opportunity and risk. Retail traders may view silver as a tactical hedge against inflation and a diversifier from gold, but the heightened volatility means price spikes can be abrupt and short‑lived. In the Indian market, the scarcity could push MCX silver to roughly ₹3.20 lakh per kilogram, or about $3,900, underscoring the global ripple effect. Savvy participants should monitor delivery‑related metrics, the evolving Gold‑Silver Ratio, and broader industrial consumption trends before allocating capital.