Silver Squeeze Deepens as Global Inventories Plunge and Gold Reserves Surge
- Silver and gold cooled off slightly this week, with silver closing just under $50/oz and gold around $4,065/oz, keeping the gold–silver ratio near 81.
- Global silver inventories continue to drain, from China’s SGE/SHFE warehouses to COMEX, which has shed nearly 70 million ounces in just a few months.
- Even SLV saw a rare 3-million-ounce withdrawal from JPMorgan’s NY vault—its first meaningful move like this in the 2020s. Something’s stirring.
- Metals Focus says the world is facing the deepest silver supply deficit ever on record—about 295 million ounces for 2025 once ETF flows are counted.
- The cumulative silver deficit since 2019 now tops 1.3 billion ounces, painting a long-running squeeze that keeps tightening.
- UBS sees silver as increasingly vulnerable to liquidity squeezes, expecting upside bursts and price spikes—especially when investor demand flares up.
- Analyst Joni Teves says silver should outperform gold in 2026, with upside cases pointing toward $55–$65/oz, riding gold’s coattails.
- Jim Rickards doubles down, arguing silver is not just a metal but a form of money, and that if gold heads toward $10,000, silver tagging $100–$150+ isn’t far-fetched.
- On the gold side, central banks—especially outside the West—keep piling in, while China likely holds far more gold than it publicly reports, reinforcing a long-term bullish foundation.
- Western fund managers remain oddly complacent, but historically speaking, gold still looks cheap next to stock markets—and silver even cheaper—both setting up for what could be major relative outperformance into the 2030s.
Record-breaking silver deficits, shrinking warehouse stocks, and aggressive central-bank gold buying are redefining the precious-metals landscape—and setting the stage for explosive moves into 2026.
We continue to see large movements of silver bullion out of major exchange inventories and unsecured ETF warehouses the world over.
This chart we showed you last week combines the still collapsing silver bullion inventories of China's combined SGE and SHFE silver warehouses.
Another some -3 million ounces were recently pulled this week.
You can see how large the recent outflows of silver exports from China have been lately on a historical basis, the bottom part of this chart the best way to see how irregularly large they have been lately.
From its recent inventory peak, COMEX silver warehouses have fallen by near -70 million oz over the last few months.
Interestingly this week, for the first time this decade of the 2020s, we saw some 3 million ounces of unsecured SLV silver holdings withdrawn from JPMorgan's NY warehouse. Why such large outflows, now?
At issue here is the big continuing picture of world silver supply deficits ongoing.
Demand outstripping supplies for silver worldwide.
Silver market analysts MetalsFocus wrote the following this week:
"More importantly, this ongoing deficit coincides with a notable rise in silver investment. Silver ETPs, for example, are on track for the second-largest annual increase in 2025. In fact, when changes in ETP holdings are included, the market balance points to the deepest supply shortfall on record."
That deepest silver shortfall on record is estimated by the Silver Institute to be -295 million oz for this year 2025 when such recent large unsecured silver ETF and ETP demand is counted into the silver supply deficit picture.
And so silver's ongoing supply deficit is worse than reported when unsecured Silver ETF/ETP demand is considered, this goes back all the way to 2019. It is now an over est. –1.347 billion oz deficit these last 7 years using this the Silver Institute's ongoing data.
Swiss bank giant UBS had some interesting silver market commentaries this week, echoing silver market tightness ongoing.
Stating that they see silver risks skewed to the upside amid the potential for liquidity squeezes to re-emerge. They see the current silver market “increasingly vulnerable to periods of strong investment demand,” raising the probability of liquidity squeezes similar to those seen in late 2025, when silver lease rates spiked sharply.
Tight inventories, shifting metal between regions, and metal being held in non-deliverable forms can intensify short-term dislocations, creating conditions for rapid price spikes when demand surges.
UBS strategist Joni Teves was on CNBC India this week speaking to her bank's view on Silver into 2026.
Tightness In Silver Physical Market To Support Prices, Target Of $55-65/Oz In 2026: UBS | CNBC TV18
Best selling author Jim Richards went on HedgeEye TV this week speaking with Keith McCullough about silver price potential to come.
The full over one hour discussion is back linked in the show notes, but here are a few highlights.
Gold, Chaos & The Reckoning Ahead: Jim Rickards 1-on-1 w/ Keith McCullough
This week UBS strategists also noted that “gold remains under-owned relative to total assets and we believe there’s room for allocations to keep rising.”
Judging by 20th Century historical financial data, that statement is likely understated by many multiples to come for gold.
After this brief introduction, we'll take a big picture look out for where gold's bullion bull market is growing.
Western investment fund managers are still complacent judging by their recent guesses as to where gold is going next year 2026. We'll have a look at that data right after this.
The spot silver and gold price sold off slightly on the week's trading.
The spot silver price closed the week at $49.95 oz bid and the spot gold price finished this week at $4065 oz bid.
The spot gold-silver ratio ends this week at 81.
Official gold holdings amongst some of the world's largest economies are here, and you can see the old waning Western powers are the ones with the outsized gold allocations of just over 70% of their national savings held in gold bullion tonnage reserves.
China has been doing a lot of catching up since the 2008 GFC, and now the mainstream fiat financialized media is here to admit that China's gold holdings are likely at least twice what they currently claim.
Just wait a few years, these guesses will get larger.
China's SAFE, or State Administration of Foreign Exchange has 1 and 5 year targets according to a former official. The nation's gold reserve buying are not only made by SAFE and its intermediaries, but also China's son wealth fund CIC, and the Chinese military (neither of which are mandated to disclose their holdings on a timely basis).
China is also the world's largest miner of gold pulling about 1 of 10 new ounces from the ground last year.
China is also courting developing nations to buy and hold gold using expanding Shanghai Gold Exchange warehouses with Cambodia being announced as a recent buyer of SGE gold in renminbi.
Ever since the freezing of Russian US Treasury assets, the developing world's central banks have been buying gold reserve tonnage at a record never before seen pace.
With little to no sign of that trend stopping anytime soon, we should gander at which nations have the most proven gold to mine in their respective grounds.
Russia & Australia lead the current estimates by far with some estimated 12 thousand tons a piece to mine in time.
Interesting fourth placed Indonesia this week announced a new gold export tax of up to 15% to reportedly encourage domestic processing and buying of the internally mined gold. And not just seeing it flee offshore to the highest bidders in other words.
The trend of export taxes on bullion and precious metals is likely to grow.
In terms of gold price guess for next year, this recent BofA poll of mostly Western world investment fund managers basically shows a split of thirds. One third being bearish calling for below $4000 oz gold next year, one third calling for flat to slightly up near $4500 oz high, and the final third guessing gold over $4500 oz is coming next year with one 1/20th of those polled thinking gold above $5000 oz next year is coming.
Gold remains a cheap call option on continued fiat currency debasement and still a contrarian bet versus still historically overvalued asset classes like the overpriced US stock market relying on over-promises of AI to some how bring it higher in real times.
I'm gonna keep fading that and buy bullion over US stocks expecting the old 2011 lows in the S&P500/gold ratio to eventually get met and then go even lower into next decade the 2030s.
Similar but even more pronounced move is likely also in store for silver bullion in relative value gains versus the US stock market to come. Using long term historical data, silver has much in terms of potential gains to come into next decade.
References:
Silver to see ’periods of significant outperformance vs gold’, says UBS
