Larger investors who hold deliverable bars aren't throwing in the towel and dumping them back into the market. Instead, they continue to stack, much like retail investors buying the smaller coins, rounds and bars.

An attempt by Reddit users to create a "silver squeeze" in early 2021 marked the beginning of the year-and-a-half long trend of steadily declining bar inventories. The grassroots movement was an attempt to break the crooked price discovery scheme in silver.

Buyers were encouraged to purchase silver and take possession. The hope was that the tiny inventory supporting a mountain of paper derivative metal would disappear. Shorts would have to bid more and more for available bars in order to exit their positions and end the pain.

The buzz around the "silver squeeze" faded from the headlines over a year ago, but the draining of inventory continues.

As available stocks decline, the prices paid for deliverable bars in the cash market keep getting higher versus paper silver futures.

The mismatch in prices between the two markets is way outside of normal and should serve as a warning.

Buyers are paying up to get physical metal, and they are bearing the cost of storing large bars.