Silver Market Analysis: February 2026 Executive Brief

Global Inventory Status

Current exchange data indicates a severe tightening of physical silver supply. As of mid February 2026 COMEX silver inventories in the Registered category have breached the critical 100 million ounce psychological floor falling to approximately 98.1 million ounces. This represents a significant decline in deliverable supply available for futures settlement. Total system withdrawals including the Eligible category have reached rates as high as 4.7 million ounces in a single 24 hour period.

The LBMA London vault holdings reported a 4.5 percent decrease at the end of the last reporting cycle totaling 22462 metric tons or approximately 722 million ounces. While the LBMA maintains a larger absolute volume than the COMEX analysts estimate the free float—silver not already allocated to ETFs or private owners—is likely between 200 and 300 million ounces. This level is becoming increasingly insufficient to cover the high volume of daily paper trading and the structural industrial deficit.

Industrial Demand Forecasts

The photovoltaic PV sector remains the largest industrial consumer but is undergoing a transition. While global solar capacity is expanding by 15 percent in 2026 total silver demand from the sector is projected to fall by roughly 7 percent year over year to 194 million ounces. This is driven by aggressive thrifting and substitution as silver now accounts for nearly 17 to 29 percent of PV module costs at current price levels.

Conversely the Electric Vehicle EV and automotive sectors are seeing a surge in consumption. EV related silver demand grew an estimated 20 percent in the previous year and is expected to continue this trajectory as the global EV fleet is predicted to grow by 30 percent in 2026 reaching 116 million vehicles. Increased per vehicle silver content for sensors power electronics and charging infrastructure is offsetting the reductions seen in the solar industry.

Gold to Silver Ratio and Price Discovery

The Gold to Silver Ratio GSR has experienced a dramatic compression. After starting 2025 at nearly 100 to 1 the ratio has dropped to approximately 57 to 1 to 65 to 1 as of February 2026. This indicates massive silver outperformance relative to gold which is typical in the late stages of a precious metals bull market. Silver is currently in a price discovery phase after breaking through multi year resistance at 54 dollars. Technical targets for the remainder of 2026 are focused on the 72 dollar to 88 dollar range supported by persistent annual supply deficits of approximately 67 million ounces.

Real Time Physical Market Intelligence

Professional traders and bullion desks are reporting significant physical delivery premiums over the COMEX spot price. Real time updates from the Shanghai Gold Exchange SGE show premiums of nearly 10 dollars per ounce over Western benchmarks signaling that physical metal is flowing aggressively from West to East. In the retail and wholesale Good Delivery markets premiums remain elevated due to spotty institutional availability especially for 1000 ounce bars. Traders on X and other professional networks highlight that the January 30 paper price volatility has only accelerated the shift toward physical ownership and away from leveraged futures contracts.
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