Silver inventories tracked by the Commodity Exchange, Inc. (COMEX) have fallen to their lowest level in years, dropping below 90 million ounces in February 2026, according to exchange data. The decline, which began in October 2025, signals a potential shift in the global silver market as physical demand strains the availability of metal to back paper contracts.
As of February 20, 2026, total COMEX silver inventories stood at 366.25 million ounces, a decrease of nearly 31% from the approximately 532 million ounces held in October 2025. Registered silver stocks – those immediately available for delivery against futures contracts – totaled 88,191,059.264 ounces, while eligible inventories, meeting COMEX specifications but not currently warranting delivery, declined to 278,065,980.223 ounces.
The dwindling supply has created a significant imbalance between paper contracts and physical silver, with open interest exceeding available registered stock by over 400%, according to Aamir Makda, Commodity & Currency Analyst at Choice Broking. “This creates a significant paper-to-physical imbalance and raising the risk of a liquidity event if contract holders demand delivery,” Makda stated. He also noted a price divergence, with silver trading at a premium of more than $10 in Shanghai compared to Western spot prices.
The CME Group, which operates COMEX, has responded to the increased volatility by raising margin requirements, triggering temporary price corrections as leveraged positions were deleveraged. This action highlights the exchange’s concern over potential instability in the market.
Harshal Dasani, Business Head at INVasset PMS, described the current situation as a “highly sensitive phase” characterized by a widening gap between physical fundamentals and paper positioning. He pointed to combined inventories across China’s Shanghai Gold Exchange (SGE) and Shanghai Futures Exchange (SHFE) – estimated at around 700,000 kilograms – contrasted with COMEX’s registered silver stocks, underscoring the disparity.
Dasani attributed recent price corrections to technical factors, including margin hikes and forced unwinding of positions, rather than a decline in underlying demand. “Silver remains in structural deficit due to industrial usage and limited mine expansion,” he said, adding that major US banks continue to hold substantial short positions, potentially suppressing prices.
Vandana Bharti, Head of Commodity Research at SMC Global Securities, cautioned that while lower registered stocks reduce the delivery cushion, COMEX inventories represent only a portion of global supply. She explained that eligible metal can be reclassified as registered and additional supply could approach from imports or over-the-counter markets. “The real risk for March depends on how much open interest stands for delivery compared to available registered stocks,” Bharti said.
Looking ahead, Makda expects MCX silver prices to trade between ₹2,50,000 and ₹2,80,000 per kilogram in the near term. He warned of a potential “delivery squeeze” driven by delivery notices from institutions like JP Morgan, suggesting a move to secure physical bullion. Ajay Kedia, Director of Kedia Advisory, added that a break above $90 could trigger further price increases, supported by ongoing structural deficits.
With Chinese markets reopening, renewed physical buying could quickly emerge. March is expected to remain volatile, but Dasani suggested that price dips may present buying opportunities rather than signaling a trend reversal.