Why It Isn’t the Top It Looks Like

The US Mint sold zero Silver Eagles in May, the first full-month zero
since the 1980s, and it is not the bearish signal it looks like.

Silver has had a violent few weeks. It fell to around $68 an ounce in
early June as a run of strong economic data pushed the Federal Reserve
toward higher-for-longer, and it has since bounced back toward $70 after
a US-Iran peace framework eased the energy shock that had been feeding
inflation. For anyone holding silver, though, the more unsettling story
during the selloff was not the price. It was the plumbing. The
warehouses that back the silver futures market were filling up, and the
US Mint sold zero American Silver Eagles in May. On its face, that looks
like the silver shortage everyone has been talking about is finally
over. It is not, and the reason matters more than the headline.

As of June 16, silver trades near $70.40 an ounce, up roughly 90%
from a year earlier and roughly flat on the year, though still about 42%
below its January high near $121.67. The gold-silver ratio has tightened
back toward 61.5. The macro tape is doing most of the driving right now.
Markets have largely priced out the December rate-hike risk that drove
the early-June selloff, and the Federal Reserve under new chair Kevin
Warsh holds its first meeting on June 16 and 17, with a decision
expected to leave rates unchanged.

The research behind this issue comes from the Silver Engineer at Golden Meadow, who tracks more
than a hundred separate forces that move the silver price. The physical
market, the actual metal moving through exchange vaults and coin shops,
is one of the most misread of them. When the price falls and inventories
rise at the same time, the instinct is to call it a glut. The discipline
is to ask why the inventory rose. That single question separates a
market that is breaking from a market that is simply catching its
breath.

There are five Deep Dives in this issue of the premium Silver Catalyst
newsletter, and in this article, I’ll focus on one of them: the physical
market.

The Physical Market: COMEX
and London

Start with what this looks like from the outside, because the surface
reading is the misleading part. When silver is genuinely scarce, two
things happen. The vaults that back the futures market drain, and anyone
who wants a coin in hand pays a steep premium, an extra charge above the
spot price, to get one. In late May and early June, both went the other
way. Warehouse stocks rose and coin premiums shrank, which on its face
looks bearish, as if the shortage had broken. It had not. The price fell
for monetary reasons, the same rate repricing that drove the broader
selloff, and the physical market simply stopped adding any upward pull
of its own. The effect was a prop removed, not a fresh leg down.

Look at why each number moved. By the June 15 report, combined silver
stocks in the COMEX exchange warehouses stood at roughly 320 million
ounces, with registered metal at about 85.2 million ounces, the high end
of a steady build through late May and early June. Registered is the
metal actually on offer to settle futures contracts; eligible is metal
sitting in the same vaults but not currently for sale. The detail that
matters is the source of the build. The registered pile grew because
physical bars arrived and warehouses shifted metal from the eligible
category into the deliverable one to meet the June delivery cycle, not
because demand for the contracts dried up. That is a more durable form
of easing than a statistical one. Roughly 14.1 million ounces stood for
June delivery, so buyers were still taking delivery of real metal even
as speculative traders trimmed their positions.

London told the same story. Vault holdings in the London market held
roughly flat at 27,454 tonnes at the end of April, down just 0.1% on the
month, a stabilization after the late-2025 squeeze, when holdings
drained sharply and the cost to borrow silver short term, the lease
rate, spiked toward 39%. The retail channel diverged hardest of all. US
Mint sales of the one-ounce American Silver Eagle bullion coin fell to
zero in May, and the 2026 coin traded as low as about 8.5% over
spot, against the 12% to 20% premiums typical when the channel is tight.
That zero was demand-driven rather than a Mint suspension, the first
full-month zero since the program’s launch period in the 1980s. The
wholesalers who buy coins directly from the Mint held back, because
ordinary buyers would not pay the current premiums and dealers were
already clearing repurchased coins through discounts. The wholesale
market in large good-delivery bars stayed comparatively tighter than the
coin market. So the right read is a split between retail and wholesale,
and a US retail step-down of roughly 2 to 4 million ounces a month, not
premiums collapsing everywhere.

Sources: CME Group – COMEX Warehouse and Depository
Stocks | LBMA – London Vault Data | US Mint – Bullion Sales Figures |
FindBullionPrices – Silver Eagle Sales Hit Zero in May

What This Means to Silver
Investors

The takeaway is to separate two things that moved together. The
silver price fell because the macro turned against it, not because the
world suddenly had too much metal. The vaults filled because bars
arrived to settle June contracts, and the Mint sold nothing because
retail buyers refused to chase premiums after a sharp drop. Both are
downstream of price and sentiment. Neither touches the supply and demand
balance underneath. That balance is still a deficit. 2026 is on track
for a sixth consecutive annual shortfall of about 46.3 million ounces,
according to Metals Focus and the Silver Institute, the same structural
gap I build the case around in Silver Rising.

This is why the physical easing reads as slack rather than abundance.
The metal sitting in exchange vaults is mostly spoken for or held by
long-term owners, not fresh supply hunting for a buyer. The retail
step-down is a few million ounces a month of demand that left on
sentiment and tends to return on sentiment, often quickly once the price
steadies. With the US-Iran peace framework easing the energy shock and
the market pricing out the rate-hike risk that drove the selloff, silver
has already bounced back toward $70. A physical market that loosened on
the way down can tighten again on the way back up.

None of this changes the long arc. The longer-term case for silver
still rests on a structural deficit that the physical plumbing did not
resolve, and the way silver
has traded throughout 2026, a round trip from a January high above
$121 to the high $60s and back toward $70, is a clear illustration of
how a small market amplifies swings in sentiment. The investor lesson
from the physical data is simple. When the price falls and the vaults
fill at the same time, ask why the metal moved before you call it a
top.

The physical market is one dimension of the 100-catalyst framework I
analyze in Silver
Rising, alongside the four other Deep Dives in this issue of the
Silver Catalyst newsletter. If you’ve at least considered investing in
silver, I strongly encourage you to sign up, because it takes just $1 to
get both. Get
full Silver Catalyst Newsletter and Silver Rising book for $1
today.

Thank you.

Przemyslaw K. Radomski, CFA

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