February silver contract deliveries surge besting the prior record by 43%

Meanwhile, the pivotal March silver contract is running hot with 6 days to first notice.

February 20, 2025 10:00 AM

Talking silver today … reviewing the last three contracts, December was the most recent active month. Delivered silver totaled 9,166 contracts (45.8 million oz). That was the highest transfer since March 2022 which was the contract in delivery during the Russian invasion of Ukraine. You can see the December surge in full context on the plot below.

January, an inactive month, followed with strong deliveries of 2,370 contracts. That was the highest for an inactive contract since Feb 2022.

The February contract is now in the delivery window. It is already the highest inactive month on record with 4,370 contracts and another week of trading remains. That is 43% greater than the previous record in January 2022.

I’ll continue on this thought in a moment, but now that the plot above is in your mind … I find it interesting that the micro-silver 1,000 oz contract (Ticker = SIL) has not seen a boost in activity. See that in the plot below. In fact, delivery activity has slowed since peaking in early 2024.

I think of silver demand being indicated in 4 tiers. First the bullion banks, second customer accounts on the 5,000 oz contract, third, accounts on the 1,000 oz contract and last, retail demand. A good proxy for retail is new units issued at PSLV, Sprott’s physical trust. New units at PSLV have been minor of late, nothing like during silver squeeze.

At the moment, the big hitter is customer accounts on the 5,000 oz contract, and nowhere else. Who’s the smart money?

Back to talking about the 5,000 oz contract … despite the recent surge in vault totals, the current February contract has seen 25% of registered silver transfer, the highest on record for an inactive month. Often this fraction is less than half of that tally as you can see below:

The interesting thing is that most of February’s oversized deliveries have been from contracts written AFTER first notice day. For the February contract, 56% of delivered metal (so far) was from contracts created after first notice day. You can see the surge in post -FND activity on the plot below:

For both gold and silver, the transactions during the delivery period are running at record highs. Comex has turned into a physical cash market with traders buying metal for near immediate delivery.

Furthermore, the pace of new contract buying continues. That is apparent on my cumulative net new contracts plot below:

With all that said, the upcoming March contract will be the first active month contract to enter the delivery period since this chaos began in Mid December. That contract is now 6 trading days to first notice. Even at this point in time, most of those contracts will likely roll so it is difficult to estimate the amount that will stand for delivery.

With that disclaimer … the OI trend is running about 25% over the recent average although not in record territory:

I think this March contract will decide if silver is going on with the gold ride OR is this metals market just huge customer accounts buying gold? We’ll get an idea by mid next week.