Silver Price Just Lost 46% in Weeks, But 33 Million Ounces Vanished From COMEX – Here’s the Truth

Silver has been on a wild ride that defies normal market behavior. In 2025, silver climbed an astonishing 150%, peaking at $121 per ounce in January 2026. Then came the crash. 

In just two weeks, the silver price plummeted 46% to $64. Now it sits around $86 and is climbing again. This kind of volatility does not happen in a healthy market. It happens when the market structure itself is breaking.

Felix Prehn laid out the uncomfortable truth behind these moves. The silver price swings are not random. They are the direct result of a physical squeeze that exposed the fragility of the paper silver market. 

For decades, the system operated on a gentlemen’s agreement. Everyone pretended the silver was there, and nobody asked for delivery, and prices stayed manageable. That agreement broke in January.

What Really Happened in January

The numbers tell the story. In a single week in January, 33.45 million ounces of silver were physically withdrawn from COMEX vaults. That represents 26% of registered inventory disappearing in seven days. Not paper contracts. Not derivatives. Actual physical metal, pulled out of the vaults by institutions demanding delivery.

At its peak leverage, the paper silver market had 356 paper claims for every physical ounce. The system held together only because nobody called the market’s bluff. In January, someone did. Institutions stopped selling paper contracts and started asking for the metal. The COMEX had to hand it over. Inventories cratered, and the silver price responded exactly as you would expect when actual supply and demand reassert themselves. It shot to $121.

Then the exchange stepped in. Margin requirements were raised. Cash settlements were forced instead of allowing physical delivery. The system was effectively shut down, and the silver price crashed back to $64. But the underlying reality did not change. The metal was gone. The vaults were emptier. The paper market was lying about the real price.

The Physical Market Is Telling a Different Story

Right now, Shanghai and Dubai premiums for physical silver are running 10% or more above London and New York prices. This is what happens when the physical market prices above the paper market. It means the paper market is not reflecting reality. The gap between these prices represents the size of the lie.

Demand for silver has outstripped mine production for the past five years. This is not a one-time phenomenon. The deficit since 2021 adds up to almost 800 million ounces. J.P. Morgan now expects silver to trade at an average of $81 an ounce in 2026, more than double what it expects to be the average price next year. Institutions are adjusting their models to a world where physical constraints actually matter.

The Supply Problem Nobody Can Fix

Most silver is mined as a byproduct of copper. You cannot ramp up silver production without ramping up copper production, and there is a projected 5 million tonne copper supply gap by 2030. 

This means silver supply is structurally constrained in a way that higher prices cannot fix. You can throw more money at silver mining, but if the copper isn’t there, the silver isn’t coming out of the ground.

This is the part that matters for anyone trying to understand where the silver price goes from here. The physical squeeze is real. The paper market is trying to pretend it isn’t. The gap between paper and physical is where the asymmetry exists.

Read Also: Veteran Analyst Moves 40% Of Gold And Silver Holdings To Cash: “I’m Getting Pre COVID Feelings”

What Comes Next for the Silver Price

The question is not whether this happens again. The question is what happens when the vaults are actually empty. The January event was a warning shot. 

The system broke, prices spiked, and the exchange changed the rules to protect itself. But the underlying deficit remains. The physical withdrawals continue. The paper claims still far outnumber the available metal.

For now, the silver price moves back toward $86, recovering from the forced crash. The physical market in Asia is pricing in a reality that Western paper markets refuse to acknowledge. At some point, that gap closes. And when it does, the silver price will reflect actual supply and demand, not the gentlemen’s agreement that kept prices manageable for decades.

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