SILVER’S ENDGAME: ALMOST TOO OBVIOUS

From tightening physical supply to rising industrial demand and growing stress at the COMEX, the forces behind silver are quietly aligning.

The case for silver is now almost too obvious.

Silver’s Fat Pitch

Like many Americans, I grew up playing a fair amount of baseball. Part of this involved trying to hit a little round ball with the equivalent of a modified, wooden stick.

Like asset prices and market forces, this little white ball, thrown by a pitcher 60 feet away, could sink, curve or speed by you in bewildering and often embarrassing ways.

Sometimes, however, we hitters of that ball would be blessed with what is called a “fat pitch”—that is, a ball thrown so comfortably straight, clear and trackable that it was effectively impossible to miss.

Below, I’ll show why the set-up we are currently seeing in the global silver market is precisely that: A fat pitch.

Prior Silver Curve Balls

Of course, silver markets, like baseball players, have also seen a lot of curve balls and crazy swings.

We saw recent versions of this in December of 2015, when the COMEX price-fixers, with a little help from the Chicago Mercantile Exchange, or CME, raised margin prices to force a mass-selloff (i.e. price-fall) of the metal.

When that pitch failed, the COMEX threw another, far more effective margin hike (or “curve ball”) in late January of 2026to openly engineer the single-worst silver price crash in 44 years.

The reasons for these tricky pitches at the COMEX were obvious. The big players (i.e., banks) going net-short silver were literally dying under the weight of silver’s rising price moves.

Not so coincidently, the CME/COMEX then initiated another, more effective, margin hike and thereby bailed the insider banks out of the mother of all short-squeezes.

There was no price discovery, but blatant price manipulation, as fixed/rigged as the 1921 World Series. (Ironically, both the CME and the cheating, 1921 White Sox hailed from Chicago…)

But as I argued in January, such a rigged game was nothing new. The COMEX has been playing it for decades, from defeating the Hunt Brothers’ silver bid in the 1980’s (with a sell-only trick) to crushing the “Reddit mob’s” attempt to bring honest demand (and pricing) to silver in 2021.

In short, the COMEX, and the banks who effectively self-regulate it, threw a lot of curve balls which were difficult to beat.

But as we enter the 2026 macro playing field, it is the COMEX itself which is about to strike out, and this bodes extremely well for silver.

Here’s why.

Silver: About to Hit a Homerun

The set-up for silver is now nothing short of extraordinary. In fact, it is unprecedented.

At 30,000 feet, the big picture remains the same. That is, as currencies are debased to monetize unsustainable sovereign debt levels, monetary metals like silver outshine dying paper currencies.

It’s really that simple.

But the more nuanced, and often misunderstood, tailwinds for silver are a bit more complicated, though entirely clear once you know where to look.

And the first place to look is at the COMEX itself, where silver (like gold) has been manipulated downwards for decades. We’ve covered the motives, means and symptoms of this COMEX price fix in greater detail elsewhere.

What is worth noting here, however, is critical. That is, once the physical silver leaves the COMEX, the artificial price-fixing charade ends, and silver naturally rips higher.

Paper Claims vs. Physical Demand

Traditionally, for example, paper claims on silver (and gold) never resulted in actual delivery out of the COMEX. Instead, the contracts were simply rolled over or cash-settled.

But those days are ending.

As of this writing, there are more paper claims (“open interest) on the COMEX silver exchange than there are actual ounces of “registered” silver to meet delivery. In fact, there’s only about 80 million ounces on hand to meet over 570 million ounces of delivery demand.

That’s a levered mismatch of 7:1 at the COMEX.

If we then consider the larger silver market itself, including ETF silver, derivative claims, futures contracts, etc., many analysts in the commodity space are quoting the number of paper silver claims to actual silver ounces at a ratio of 350:1.

Read that last line again.

No Chairs Left

If one were to think of the paper silver market as a game of musical chairs in which the “music” represents the actual amount of physical silver available and the “chairs” represents the number of paper claims on it, the supply & demand ratios above make it mathematically clear that once the music stops, there’ll be very chairs left standing with silver.

Or stated more simply, percolating physical silver demand is about to hit a supply shock, which means silver is poised to skyrocket.

And if you look at the COMEX silver flows, you’ll quickly discover that the music is slowing down.

January applications for silver deliveries at the COMEX, for example, came in at 40M ounces, which was 40X the normal delivery rate.

A more recent delivery took 20% off the COMEX inventory in a week. (I have no proof, but I’m guessing the buyer here was JP Morgan…)

Looming Delivery Failure

At this exit pace, it’s at least plausible that the COMEX could see a bald failure of physical delivery within 90 days.

In such an event, the COMEX silver trade would be reduced to a cash-only trade, a possibility I warned of in January.

But this, of course, would only happen if one assumed the COMEX wouldn’t declare some kind of emergency in the interim, which we can be almost sure they will…

Nevertheless, the screws are now undeniably tightening on this New York exchange in ways we’ve never seen before.

This classic mismatch of supply and demand in the silver space is unprecedented, and whether the price-fixers in New York like it or not, supply and demand forces still matter, and they can be powerful forces…

Supply Deficits Colliding with Rising Demand

For example, and as most silver investors know, this metal has seen five consecutive years of supply deficits at 200M ounces/year, now aggregating to a deficit of nearly 1 billion ounces. China’s recent export restrictions for silver, moreover, aren’t helping supply flows.

Meanwhile, in the silver future’s market, we are seeing backwardation, a fancy way of saying that current prices are higher than future prices, which is a screaming signal of high demand colliding with low supply.

These factors help explain why the current lease rate for silver is at 8% levels, whereas for the bulk of my entire investing career, the lease rate had never surpassed 1%– until now.

Combine such evidence of a supply shock with silver’s rising industrial demand (60% of silver’s demand is industrial) in everything from solar panels to the missiles now cris-crossing Middle Eastern skies, and we see all the makings of a historical price hike in the metal.

After all, the silver supply can’t be magically increased with just the touch of a button. 70% of silver production comes as a byproduct of other mining.

This means there’s no silver supply miracle on the horizon.

And Then There’s War…

What IS filling our horizon, however, is the fog of war and hence the fog of oil. Supply shocks matter to oil just as much as they do to any asset, including silver.

As crude oil rises thanks to tightening flows in the Strait of Hormuz, so does inflation, and for every $10.00 rise in oil, we see a 0.1% rise in even our otherwise openly bogus inflation scale.

And as inflation rises, as it will, the monetary profile of silver just gets another tailwind as an anti-fiat metal.

Back to Baseball

Which brings me back to my original point and metaphor.

When one combines silver’s monetary profile with its rising industrial demand in a backdrop of historical supply deficits, COMEX delivery failures, rising lease prices, futures market backwardation, and all that is inherently backward as to war and rising oil, we arrive at what comes to nothing more than an unprecedented “fat pitch” for silver.

Batter up.