Original Author: Bu Shuqing, Wall Street Insights
The precious metals market is facing a potential delivery crisis.
Senior precious metals analyst Bill Holter's latest warning states that,The Commodity Exchange (COMEX) in New York may experience a physical silver delivery default as early as March 2026. This would completely destroy the credibility of the existing pricing mechanism and trigger a chain reaction spreading to the gold and credit markets, potentially leading to the collapse of the entire financial system.
Abnormal delivery demands have already emerged. According to Holter's disclosure,In January, traditionally a non-delivery month, COMEX has already received applications for the delivery of over 40 million ounces of silver, whereas the typical figure during the same period in previous years was usually between 1 and 2 million ounces. As the main delivery month of March approaches, delivery demand is expected to reach 70 to 80 million ounces, potentially depleting COMEX's currently registered inventory of 110 to 120 million ounces.
This warning comes as the silver market is experiencing an unprecedented rally. Silver prices have surged 154% year-to-date in 2025, rising about 40% just in January, far outpacing stock market performance during the same period. UBS strategists warned clients this week that the recent gains in precious and industrial metals have become "out of control."
Once a delivery failure occurs, is the financial system at risk of collapse?
The COMEX silver market is facing unprecedented physical delivery pressure. Holter pointed out that,The appearance of 40 million ounces of delivery applications in January, a non-delivery month, is an extreme anomaly, indicating that a much larger redemption rush may occur in March, the main delivery month.
"If COMEX is unable to fulfill its delivery obligations, the contract value will drop to zero,"Holter stated. He emphasized that a delivery default would completely undermine COMEX's pricing authority, as contracts that cannot be fulfilled hold no value whatsoever.
More seriously,A failure in the delivery of silver will immediately affect the gold market. Holter warned that since gold is essentially an "anti-dollar" or "anti-Treasury" asset, a default in the gold market would directly impact credit markets, thereby threatening the stability of the entire financial system.
Currently, the COMEX registered deliverable silver inventory is approximately 110 to 120 million ounces, but there are doubts in the market regarding whether these inventories are subject to double pledges or other encumbrances. If the delivery demand for March exceeds the available inventory, the market could face the worst liquidity crisis since the Silver Thursday event of 1980.
Holter painted a grim picture of the consequences of delivery default. He predicted that,If a delivery failure occurs in March 2026, it will trigger the devaluation of the currency and the collapse of the entire financial system.
"Real economy relies on credit to function. Everything you touch and everything you do involves the participation of credit," Holter said. If credit becomes inaccessible, the real economy will come to a complete halt.
This warning is not an exaggeration. The pricing mechanism of the precious metals market has long relied on paper contracts, with a very low ratio of physical delivery. Once confidence in these paper contracts collapses, investors will rush to demand physical delivery, but the exchange's inventory will be far insufficient to meet the delivery requirements of all contracts.
Given the scale of the United States' total debt and commitments, which amount to 200 trillion dollars, the financial system's reliance on credit has reached a historical extreme. A crisis of confidence in any key market could trigger a chain reaction, and the precious metals market is precisely the final anchor of the entire monetary system's credibility.
"Price prediction comically underestimates"
Although the price of silver has already broken through $100 per ounce, Holter believes the market is still in the early stages of the upward trend. He stated that,All current price forecasts—including the $600-per-ounce target proposed several years ago—will ultimately be proven to be "ridiculously underestimated."
Renowned silver analyst Peter Krauth also holds an optimistic view.It is expected that during the upcoming "frenzy phase," the price of silver could surge to $300 per ounce.Krauth believes that $50 per ounce has become the new price floor, and a sharp adjustment in the gold-to-silver ratio will be the core driver for pushing up the price of silver.
Holter provides an even more extreme valuation framework from a monetary perspective. He points out that,If we calculate based on the U.S. federal government's $38 trillion debt and use its 8,000-ton gold reserves as backing, the price of gold should reach $200,000 per ounce. The same logic applies to the repricing of silver.
Some large trading firms and banks engaged in short positions on precious metals have fallen into financial difficulties. Holter stated that the continuing rise in metal prices—especially in silver—is putting severe pressure on these institutions, which could further exacerbate market instability.
Silver's strong performance is rooted in fundamental imbalances. As a metal with both monetary and industrial attributes, silver is currently facing squeezed demand from multiple sources.
Industrial demand remains strong, particularly in the fields of solar energy, electric vehicles, and electronics. At the same time, investment demand is also surging, as investors view silver as a tool to hedge against inflation and currency depreciation.
The supply side faces structural constraints. Silver is primarily produced as a by-product of the mining of base metals such as copper, lead, and zinc, and its production cannot quickly respond to price signals. This supply inelasticity tends to cause significant price volatility when demand surges.
Krauth emphasized that all the factors necessary to sustain the upward trend for a "相当 long period of time" are already in place. Although there is a risk of a short-term pullback, the medium- to long-term trend has already been established.