Silver short squeeze deepens: registered stock covers just 14% of futures

Silver futures surged past $117 on January 29, extending a 275% rally over the past year as physical demand overwhelmed available warehouse supplies, and registered inventory now covers just 14% of outstanding futures positions, according to the latest CME warehouse report. The CME report dated January 27 shows total COMEX-approved depository holdings at 411.7 million ounces, with registered inventory—metal available for immediate delivery—down to 107.7 million ounces after a one-day drop of 4.7 million.

Total open interest stood at 152,020 contracts (760 million ounces), leaving registered stocks covering about 14.2% of paper claims; the report says even a fraction of delivery demand could put the exchange under severe operational stress. CFTC Commitments of Traders data surveyed on January 20 show commercial traders holding 90,112 contracts short and 43,723 long, a net short of 46,389 contracts (about 231 million ounces).

That net short is more than double the roughly 107.7 million ounces available for delivery, meaning shorts would need to source metal if longs insist on physical settlement, which could further accelerate price gains. The market has been in backwardation since early October, and analysts have observed unusual backward rolls from March and February into January, suggesting longs want immediate delivery.

In January, 9,608 contracts representing 48 million ounces were issued for physical delivery—nearly 45% of registered inventory.

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