The Silver Short Squeeze: Only 14% of Futures Are Covered

Silver futures have surged, driven by a severe physical supply crunch where registered COMEX warehouse inventory covers only 14.2% of outstanding paper claims, signaling a potential short squeeze. Commercial traders hold net short positions that are more than double the available deliverable supply. Market stress is further evidenced by sustained backwardation and unusual backward contract rolls, indicating immediate physical demand outstrips supply. Compounding the issue is relentless industrial demand, particularly from the solar industry, where silver now constitutes 29% of production costs, forcing manufacturers to explore alternatives like copper cells. While gold shows no comparable stress, the structural deficit in silver suggests continued upward price pressure, though the stretched market is vulnerable to sharp corrections.

(Source：BeInCrypto)