Limited Vault Inventories Are Starting to Play a Central Role
One of the key theses we have been tracking for a long time is beginning to materialize right before our eyes.
Supply dysfunctions in 2025 — and even days when the physical silver market in London’s City practically ground to a halt — have revealed an uncomfortable reality: London, the world’s largest silver market, holds only a negligible amount of physical metal compared to the billions of ounces of paper and spot claims that were sold as “immediately available.”
Once this reality began to spread among holders of these claims, it was only a matter of time before some of them chose the simplest path:
take cash, cancel their London claims, and secure physical delivery elsewhere.
If London’s problem is truly as large as the data suggest, then sourcing silver on other markets would not show up as an explosion — but rather as a quiet, rapidly accelerating increase in deliveries.
And that is exactly what we are now beginning to see.
“Yeah, we’ll take the metal. Thanks.”
Data from the CME COMEX exchange dated January 7, 2026 show that holders of 1,624 January silver contracts (each for 5,000 ounces) took delivery warrants for 8.1 million ounces of physical silver.
And a remarkable detail:
JP Morgan supplied approximately 99% of this volume to a broad range of recipients.
For the January contract — traditionally considered an “inactive month” — this was both a late and exceptionally large delivery.
But what happened next is even more interesting.
Open Interest Rises Despite Deliveries
Despite the physical delivery of 1,624 contracts, open interest in the January contract increased by +1,431 contracts and closed the day at 2,155 open contracts.
And it doesn’t stop there.
February silver futures recorded an additional increase in open interest of +1,564 contracts, ending the day at 3,423 contracts.
This is not the behavior of a classic hedging market.
COMEX as a Physical Delivery Market
A clear picture is beginning to emerge:
buyers are entering COMEX not to hedge, but to obtain physical silver — quickly and directly.
In other words, a futures market that was designed to manage price risk is increasingly being used as a substitute physical delivery market.
And this is happening at a time when:
physical silver delivery premiums are emerging across most global markets,
London remains an exception — which in itself says a lot,
and COMEX has only about 127 million ounces of registered silver available for delivery.
The Situation Can Escalate Quickly
If the silver problem in London truly amounts to billions of ounces of paper claims, then New York’s COMEX is not an infinite source either.
So far, we are witnessing the first phase — accelerating demand for physical deliveries outside London.
The question is not if this pressure will become more pronounced, but when and where it will become impossible to ignore.
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