Silver Vaults Swell in London as Inflation Data and Fed Bets Keep Prices on the Back Foot
Published on 10/17/2026 at 15:31 | Editorial boerse-global.de
Silver's physical stockpiles in London have grown for the quarter even as the metal's price continues to struggle under the weight of stubborn US inflation and the prospect of a longer stretch of restrictive Federal Reserve policy.
According to London Bullion Market Association surveys, metal held in the capital's vaults stood at 28,985 tonnes as of September 30 — a 3.22% increase on a quarterly basis. The figures track the contents of London's storage facilities and serve market participants as a gauge of physical liquidity in the UK. They are not, however, a direct measure of global demand.
A Market Running a Deficit
The build in London inventories arrives against a backdrop of persistent tightness in the primary market. The Silver Institute and research house Metals Focus, in the World Silver Survey, projected a worldwide deficit of 46.3 million ounces for the current year, following 40.3 million ounces in the prior year. Should that estimate hold, the global silver market would notch yet another annual shortfall, with mine production worldwide stuck at a broadly unchanged level, according to the study.
Those supply-side conditions have translated into sharp moves on the futures exchange. On Friday, the COMEX front-month contract settled at $57.13 per troy ounce, a daily loss of 0.8%, leaving the precious metal down 19% since the start of the year.
Inflation Shock Sets the Tone
The week's dominant driver was the September US consumer price report, which showed the index climbing 3.7% year on year — ahead of the 3.6% economists had pencilled in. The print triggered immediate selling across commodity markets as investors priced in a sustained hawkish stance from the Federal Reserve. At one point the quote slid below the $58-per-ounce mark.
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The pressure came chiefly through the currency and bond markets. A firmer dollar made the metal more expensive for buyers outside the US, while rising yields on interest-bearing paper dimmed the appeal of non-yielding assets such as silver. The CPI gauge itself rose 0.6% month on month, with the core rate running at 2.6%.
A Midweek Rebound
After the steep setback, Thursday brought a countermove. Helped by retreating yields, the COMEX front month recovered and closed the session up 3.2% at $57.60 per troy ounce. Even so, the price remains roughly 53% below its 52-week high of $121.78, a level marked at the end of January.
Safe-haven demand also lent support, with reports pointing to buying interest as equity markets came under selling pressure, while a softer dollar underpinned quotes. The broader picture remains clouded, however: the metal is still down 19% year to date.
Exchange Stocks Edge Higher
Attention has likewise turned to exchange-held inventories. Silver stocks registered at the COMEX grew modestly in midweek, with total holdings up 1.2 million to 333.2 million troy ounces. Of that, 103.1 million ounces fell into the immediately deliverable category and 230.1 million ounces into other eligible stocks.
On the corporate side, mining operator Guanajuato Silver reported consolidated output of 392,138 ounces of silver for the third quarter. Total production reached 683,675 ounces of silver equivalent, a 13.7% gain on the previous quarter. The company attributed the increase to higher throughput at several operations, while work at the Valenciana complex was paused.
Fed Meeting in Focus
For traders, the direction of monetary policy remains the decisive lever. The Federal Open Market Committee convenes for its next regular rate meeting on October 27 and 28. Until that decision, economic data and moves in bond yields are likely to set the tone for silver. Looking further out, the US Bureau of Labor Statistics has scheduled the next US consumer price report for November 10, 2026, with October producer price data to follow on November 13, 2026. In the interim, currency swings and Treasury yield developments should dictate the short-term path.
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