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Silver Above $118: What the Data Says About Supply Bank Claims, and Why Crypto Is Lagging
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Key Takeaways
Silver’s rise above $118 in January 2026 was driven by strong demand and falling U.S. exchange inventories, not proven bank hoarding.
There is no official evidence that central banks are accumulating silver as a reserve asset.
Analysts warn that heavy speculation could lead to sharp price corrections despite strong fundamentals.
Gold and silver have attracted defensive capital while Bitcoin and other cryptocurrencies lag in risk-off conditions.
Silver prices surged above the $110–$118 per ounce range in late January 2026, marking one of the strongest rallies in modern precious-metals trading.
The move has triggered speculation that large financial institutions are hoarding physical silver, while at the same time cryptocurrencies such as Bitcoin, Ethereum, and XRP have lagged behind metals.
This article explains what is confirmed by market data, what remains unproven, and how this divergence between metals and crypto fits into the broader macro picture.
Silver Price Action: What Happened in January 2026
Silver accelerated sharply through the final quarter of 2025, then extended gains in January 2026 alongside a broader rally in precious metals. Market reports during January 23–28, 2026 showed spot prices moving through $110 per ounce and approaching $118 on intraday trading.
🚨SILVER EXPLODES OVER $117 🚨GOLD LAUNCHES ⚡️+$300 ⚡️TO RECORD HIGH $5,424!!!
Silver has just broken out from its consolidation pattern, & gold just went SUPERNOVA. 🔥Gold & Silver Are About to Go WILD WEST…🔥 pic.twitter.com/QhwalS1fpA
Notably, the rally is part of a record-setting run across gold, silver, and platinum, driven by strong investor demand and tight supply expectations at the start of the year.
The speed of the move attracted heavy futures trading and ETF inflows, increasing volatility and reinforcing upward momentum.
COMEX Inventories: Declining Since October 2025
One of the main data points behind claims of “hoarding” is falling silver inventory on the U.S. futures exchange.
🚨 Silver futures just exploded to $109.12, up 7.68% this evening to a brand new all time high. 🥈🔥
COMEX silver inventories peaked in early October 2025 at roughly 530 million ounces.
By late January 2026, inventories had fallen to about 420 million ounces, a decline of more than 110 million ounces in under four months.
Registered (deliverable) silver also declined, tightening supply available for futures settlement.
These declines are significant and indicate physical drawdowns from exchange vaults.
However, inventory declines do not identify:
Who ultimately owns the metal
Whether it is being stored long term
Whether it has been shipped to other global vaults
Metal can leave COMEX vaults because it is transferred to London or Asia, used by industrial buyers, or reallocated between custodial categories. Declining inventories signal market tightness, but they do not prove deliberate hoarding by banks.
London Vault Data: Global Silver Did Not Disappear
While U.S. inventories fell, London data told a different story.
Silver holdings in London vaults rose month-over-month, totaling more than 27,800 tonnes at year-end.
This suggests that some silver was likely moving between storage hubs, not vanishing from global supply. If banks were broadly locking away metal, both U.S. and London vault data would likely show synchronized declines, which was not the case at year-end.
Are Banks or Central Banks Hoarding Silver?
Central Banks
There is no official reserve data showing central banks accumulating large silver positions.
Modern central bank reserves primarily consist of:
Foreign currencies
Government bonds
Gold
Silver is not widely used as a reserve asset in current monetary systems, and major custodians such as the Bank of England store gold, not silver, for official reserves. Claims of central bank silver hoarding are not supported by IMF or national reserve disclosures.
Bullion Banks
Large financial institutions known as bullion banks:
Store silver for clients
Provide liquidity to futures markets
Hedge physical and paper positions
Hold metal as collateral
This means banks may appear in vault statistics, but most metal is typically:
Client-owned
ETF-backed
Or part of trading operations
There is no audited public evidence that banks are systematically removing silver from circulation to restrict supply. While institutions are major participants in metals markets, that alone does not confirm hoarding behavior.
Structural Supply Pressures Are Real
Independent industry research groups and metals analysts have reported that:
The silver market has experienced multiple consecutive years of structural deficits, where total demand exceeded mine supply.
Industrial demand remains strong, especially from:
Solar manufacturing
Electronics
Electrical infrastructure
Because silver is both an investment and industrial metal, sudden increases in investment demand can strain available above-ground stocks even if mine production is stable.
This supply-demand imbalance provides a more direct explanation for rising prices than unproven hoarding claims.
JPMorgan Warning: Why Some Analysts Expect a Sharp Correction
Despite the rally, not all analysts are bullish.
In January 2026, Marko Kolanovic, former JPMorgan chief market strategist, warned that silver could suffer a decline of up to 50% within a year if speculative excess unwinds.
His concerns focused on:
Rapid price acceleration
Heavy momentum trading
Crowded positioning in commodity markets
Kolanovic argued that silver’s rally resembles past commodity spikes that later corrected sharply once demand normalized or financial conditions tightened.
JPMorgan is getting margin called and force liquidated on their 300B, silver, short position, but they wanted to warn you that the price of Silver is about to drop by 50%. What would you like to tell Jamie Dimon? pic.twitter.com/UxoWPbbmbG
This does not imply a long-term decline for crypto, but it does show that in the current macro environment, traditional safe-haven assets are capturing defensive capital first.
What the Evidence Supports and What It Does Not
Supported by Data
Silver rose above $110 and approached $118 in late January 2026
COMEX inventories declined by over 110 million ounces since October 2025
Industrial and investment demand remains strong
London vault inventories did not collapse at year-end
Not Proven
Central banks hoarding silver
Coordinated bank strategy to restrict silver supply
Permanent disappearance of physical metal from global markets
Silver Price Outlook 2026: What the Latest Market Data Really Indicates
Silver’s surge above $118 in January 2026 reflects a market experiencing real supply tightness, strong industrial demand, and aggressive investment flows, amplified by speculative momentum in futures markets. While exchange inventories have fallen, global vault data does not support the claim that banks are secretly hoarding silver on a large scale.
At the same time, cryptocurrencies have lagged as investors shift toward traditional safe-haven assets during a period of macro uncertainty. Analysts remain divided on whether silver’s rally is sustainable, with warnings from former JPMorgan strategist Marko Kolanovic highlighting the risk of a sharp correction if speculative pressure fades.
The current environment is best understood as a high-volatility commodity cycle, not a confirmed institutional supply lock-up.
Is there proof that banks or central banks are hoarding silver in 2026?
No verified public data confirms large-scale silver hoarding by central banks or commercial banks. Modern central bank reserve disclosures focus on gold and foreign currencies, not silver. While bullion banks store and trade large volumes of silver, most of that metal is typically held on behalf of clients, ETFs, or as part of normal market-making and hedging operations, not as long-term proprietary stockpiles.
Why are COMEX silver inventories falling if global silver still exists elsewhere?
COMEX inventories reflect silver stored specifically in U.S. exchange-approved vaults for futures settlement. Metal can leave these vaults because it is shipped to industrial users, transferred to London or Asian vault systems, or reclassified between “registered” and “eligible” categories. A decline in COMEX stocks indicates tighter deliverable supply for futures contracts, but it does not mean global silver supply has disappeared.
Why did silver outperform Bitcoin and other cryptocurrencies in January 2026?
In early 2026, investors shifted toward traditional safe-haven assets such as gold and silver due to macroeconomic uncertainty and geopolitical risks. Cryptocurrencies are still treated by many institutional investors as risk-sensitive assets that perform better when liquidity is expanding. As defensive positioning increased, capital flowed more strongly into precious metals than into digital assets.
Why did JPMorgan’s former strategist warn of a possible 50% drop in silver prices?
Marko Kolanovic, former JPMorgan chief market strategist, warned in January 2026 that silver’s rapid price rise showed signs of speculative excess. His concern was that momentum-driven trading and crowded positioning could reverse if financial conditions tighten or demand cools, potentially leading to a sharp correction even if long-term fundamentals remain supportive.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Onkar Singh has three years of experience as a digital finance content creator. Throughout his career, he has collaborated with various DeFi projects and crypto media outlets. In his leisure time, he enjoys fitness activities at the gym and watching movies across different genres. Balancing his professional and personal interests, Onkar continues to contribute to the digital finance landscape while pursuing his hobbies.
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