The Great Silver Disconnect: Paper – v – Physical (12th February 2026)
The Great Disconnect: $83 Comex Paper – v – REALITY ($89+ for Physical Silver)
The Silver Disconnect** **$83 USD COMEX Price vs $89+ Reality** *(What the Media Aren’t Telling You!)*
The Silver Disconnect: $83 USD COMEX Price vs $89+ Physical (Real) Silver Price
[What the Media Aren’t Telling You!]
In recent months, a significant divergence has emerged between the COMEX paper silver price and reality. As we delve into this complex situation, it’s crucial to uncover the underlying factors contributing to this disconnect and what this means for investors considering silver.
Understanding the Silver Market Disconnect
Earlier this year, silver prices soared to an all-time high of $121 per ounce, only to plummet over 30% shortly thereafter. Presently, COMEX claims silver is trading around $83 per ounce. Meanwhile, acquiring physical silver tells a different story. American Silver Eagles are fetching nearly $98 an ounce—an eye-opening 19% premium above spot. What’s driving these premiums? Among the factors is China’s implementation of export restrictions on refined silver at the start of the year. With China handling 60 to 70% of global silver refining, these restrictions have exacerbated the already tight supply dynamics, resulting in increased premiums and delivery delays.
Examining the Supply Deficit
From 2021 to 2025, the silver market operated at a supply deficit, culminating in a cumulative shortfall of about 820 million ounces. 2026 is projected to extend this deficit streak, indicating a structural imbalance that poses additional pressures on physical markets. Notably, in mid-January, a dramatic 26% of Comex’s registered silver inventory was withdrawn in just seven days, underscoring the urgency of the supply situation.
Paper Silver vs. Physical Reality
The mechanics of the COMEX silver market hinge on futures contracts, mainly settled in cash rather than physical delivery. As of February 3rd, 2026, the leverage ratio—comparing paper claims to available physical silver—stood at 8.7 to one, signifying that expectations hinge upon the majority not demanding actual metal delivery. Yet, if significant numbers of contract holders call for delivery, the system could face disruption. With China’s refined silver exports restricted, a scenario could emerge where COMEX inventories cannot meet delivery demands.
Historical Precedents and Geopolitical Influences
Past events, such as the 2008 financial crisis and the 2020 COVID panic, have shown similar disconnects where paper prices did not reflect physical availability. However, China’s reclassification of silver as a strategic material, akin to its handling of rare earth materials, adds a new geopolitical layer that could further strain the global silver supply.
The Road Ahead for Silver Investors
For DIY investors eyeing silver, the current disconnect offers both risks and opportunities. Physical silver merchants charge elevated premiums, while paper silver offers liquidity but with counterparty risks. Meanwhile, China’s silver situation introduces complex geopolitical uncertainties, potentially affecting market movements for some time. Ultimately, understanding these dynamics and assessing data—such as Comex inventory levels, physical premiums, and Chinese export patterns—is critical for navigating the silver market. As the disconnect continues to amplify market stress, prudent investors must weigh their strategies carefully, knowing global fragmentation has become more pronounced.
In this fast-changing landscape, embracing both the risks and the strategic opportunities will be paramount for all investors in precious metals. So, as we try to make sense of this evolving situation, staying informed and critically analysing the landscape will be key to successful investment strategies.
Mick (12th February 2026)