COMEX Silver Withdrawals Spark Concern Over Market Tightness
COMEX silver withdrawals have raised questions about physical demand and potential delivery stress in the market. According to Mike Maharrey, host of Money Metals Midweek Memo, the silver futures market carries a risk similar to that of fractional-reserve banking.
The problem arises when most traders settle or roll their contracts rather than taking physical metal, resulting in paper claims far exceeding the amount of available metal for delivery. Estimates suggest a ratio of 100-to-1 or even 250-to-1, although exact figures are unclear.
Recent data shows that approximately 7.1 million ounces left COMEX vaults between September 10 and 17, representing about 2.1% of total inventory. This is roughly 25% larger than the drawdown recorded in October 2025, but unlike previous episodes, registered inventories increased during this period.
The silver market has already experienced two significant squeezes in the past year, with prices reaching $120 an ounce in January before a correction. The underlying supply-and-demand problem has not disappeared, and the market is on track for its sixth straight annual supply deficit, expected to approach 800 million ounces by the end of this year.
Investors should be cautious when considering the impact of rising interest rates on gold and silver prices. While higher yields can create an opportunity cost for non-yielding assets, the real interest rate is a more important measure, which in this case is still relatively low at 1.5%.