Sprott Physical Silver Trust Rallies 5% as COMEX Registered Stocks Plunge 70%
Open interest in silver futures fell from 110,000 contracts in December to 76,000 by March, while COMEX registered inventories plunged 70% since 2020 to 103 million ounces. Sprott Physical Silver Trust has risen 5% year-to-date as the Feb. 27 first notice day threatens a physical delivery squeeze.
1. Open Interest and Physical Demand
Open interest in silver futures fell from roughly 110,000 contracts in early December to about 76,000 by March, underscoring a sustained tension between paper and physical markets. Despite lower futures positions, demand for physical silver has remained strong, draining exchange vaults as buyers accumulate at depressed prices.
2. COMEX Inventory Crunch
COMEX reports approximately 400 million ounces of total silver, but only 103 million ounces are registered and available for delivery. Registered inventories have plunged 70% since 2020, raising concerns that modest delivery requests could exhaust available metal before the March delivery cycle.
3. ETF Performance and Delivery Risk
Sprott Physical Silver Trust has gained over 5% year-to-date, reflecting investor response to tightening physical supply. With the Feb. 27 first notice day looming, a surge in delivery requests could trigger premiums, volatility, and potential allocation challenges for ETF holders.