COMEX silver inventories are draining at an alarming rate as a short squeeze enters full swing. According to Trendforce data, as of January 28, 2026, total silver held in COMEX-approved warehouses stood at approximately 415 million ounces, down 117 million ounces (22%) from the September 2025 peak of 500 million ounces, the lowest level since March 2025.
Registered Inventory Collapse: Short Sellers Face Delivery Crisis
The most critical shift is in Registered inventories — silver available for delivery against futures contracts. Data shows Registered inventories have plunged to levels not seen in a decade, as metal has been transferred to Eligible (private storage) or withdrawn from the exchange system entirely. This structural shift reflects silver's transformation from a mere trading asset into a strategic industrial commodity, being pulled from vaults by AI and solar manufacturers seeking physical utility over paper volume.
Financial research firm The Kobeissi Letter posted on social media platform X on Jan. 28: “COMEX silver inventories are falling: Silver inventories in COMEX warehouses have fallen -34 million ounces from their high, to 415 million ounces, the lowest since March 2025.” The post added: “The stockpile has dropped -117 million ounces, or -22%, since September’s peak. Falling silver inventories indicate strong physical demand as short sellers struggle to find actual metal to deliver against their futures contracts.”
Self-Reinforcing Squeeze Mechanism
Kobeissi Letter elaborated on the mechanics: “When these traders cannot find enough physical silver to buy, they have to pay higher prices demanded by sellers. This pushes silver prices even higher, which then forces more traders to buy to avoid losses, tightening market conditions even further.” It concluded: “The silver short-squeeze is in full-swing.”
Low inventory levels amplify volatility, as any news about delivery pressure can trigger sharp price swings. Meanwhile, rising industrial consumption — particularly from AI data centers and solar photovoltaic manufacturing — has made it harder to replenish exchange inventories. Global mine output growth remains sluggish, constraining supply-side recovery.
Market Implications & Risks
Exchange-held silver inventories are often evaluated alongside futures open interest, industrial consumption, and global mine output. Continued withdrawals from regulated warehouses can reduce immediately available supply, amplify volatility, and heighten sensitivity to delivery risk across global silver markets. Analysts warn that if the short squeeze escalates further, silver prices could experience nonlinear upside and potentially spill over into other precious metals markets.