The United States precious metals market rests on an infrastructure that has changed surprisingly little in more than half a century. While trading volumes in gold, silver, platinum, and palladium derivatives have expanded dramatically and tangible commodities have become increasingly financialized, the physical storage network that supports regulated futures contracts remains concentrated in a narrow geographic corridor: the Greater New York City area.
That concentration is now being challenged. In 2026, amid extreme volatility in precious metals, global supply chain disruptions, war-driven geopolitical instability, and mounting concern over the resilience of U.S. financial infrastructure, bipartisan lawmakers introduced the System Integrity through Licensed Vault Expansion and Resilience Act, better known as the SILVER Act. The bill seeks to amend the Commodity Exchange Act by forcing a geographic expansion of exchange-approved precious metals depositories across the continental United States. Supporters argue that the legislation is not a minor administrative reform. They see it as a national security measure, an anti-monopoly intervention, and a long-overdue modernization of the physical infrastructure underlying America’s precious metals futures markets.
Paper contracts dominate modern commodities markets. Most futures traders never intend to take delivery of gold, silver, platinum, or palladium. Speculators, funds, algorithmic traders, and commercial hedgers typically close or roll their positions before expiration.
Yet the credibility of these contracts depends on one foundational premise: physical delivery must be possible. If a buyer stands for delivery at contract expiration, the exchange must be able to facilitate the transfer of actual metal. That requires approved vaults in which bars are stored, weighed, assayed, documented, and warranted in accordance with exchange standards.
In the precious metals market, metal held in an approved facility may be classified as “eligible” inventory if it meets the exchange’s specifications. Once a delivery warrant is attached to that metal, it becomes “registered” inventory available for delivery against a futures contract. This delivery mechanism is what anchors paper pricing to physical reality. Without it, futures prices risk becoming detached from the underlying commodity. That is why the location and accessibility of approved vaults matter so much.
For decades, exchange-approved depositories for U.S. precious metals futures have been concentrated near New York City. Under long-standing exchange practices, vaults used for delivery against gold, silver, platinum, and palladium futures have generally been required to operate within roughly 150 miles of New York. When these rules emerged in the 1970s, the logic was understandable. New York was the center of American finance, global banking relationships, shipping documentation, paper warrants, and in-person audit activity. Concentrating storage near the financial center reduced operational complexity. But what was once a convenience has become, in the eyes of critics, a systemic weakness. By 2026, the financial world is digitized, national supply chains are more sophisticated, and major mining, refining, minting, and vaulting operations exist far beyond the Northeast. Yet all 11 CME-approved silver depositories remain located within the New York-centered corridor.
This structure effectively excludes modern depositories in the West, Midwest, South, and Mountain states from participating directly in regulated futures settlement, regardless of their security, capitalization, or operational capabilities. The result is a highly concentrated physical settlement system that supports national and global derivatives markets.
The push for reform gained urgency in 2026 as several pressures converged: war, supply chain instability, extreme price volatility, and sovereign demand for physical gold. The ongoing war in Iran has intensified global supply chain stress, particularly around critical maritime routes in the Middle East. Insurance costs, shipping delays, sanctions risks, embargoes, and potential kinetic disruptions have all increased the fragility of international logistics.
For precious metals markets, this matters because physical supply cannot be created with a keystroke. If international shipments are delayed or rerouted, domestic settlement capacity becomes far more important. A vaulting network concentrated in a single region becomes a potential point of failure. At the same time, precious metals prices have experienced historic volatility. Gold traded near $4,448 per troy ounce in May 2026, reflecting intense demand for safe-haven assets amid fears of currency debasement and geopolitical instability.
Silver has been even more volatile. After reaching a reported all-time high of $121.67 per ounce on January 29, 2026, silver later fell to around $74.73 by mid-May. That roughly 40% decline from the January peak occurred despite persistent concerns about physical tightness and industrial demand.
For critics of the current market structure, this volatility illustrates the growing disconnect between paper trading and physical supply conditions. They argue that a geographically restricted vaulting system can worsen price dislocations by limiting the flow of metal into deliverable form and obscuring the real depth of available inventory.
Another major force reshaping the market is sovereign accumulation. Foreign central banks have been purchasing more than 1,000 tonnes of physical gold annually for three consecutive years, leading into 2026. This sustained accumulation reflects a broader movement away from reliance on U.S. Treasuries and fiat reserve assets. For policymakers, this trend has strategic implications. If foreign sovereigns increasingly treat gold as a core reserve asset, the United States cannot afford to treat its own precious-metals storage and settlement infrastructure as an outdated back-office concern. Physical metal is again becoming a strategic asset. The infrastructure used to store, clear, and mobilize it must be resilient enough to match that importance.
The SILVER Act was introduced in the House of Representatives on March 19, 2026, as H.R. 8007 by Representative Russ Fulcher of Idaho and Representative Mark Harris of North Carolina. The bill was referred to the House Committee on Agriculture, which oversees matters related to the Commodity Futures Trading Commission and the Commodity Exchange Act. A companion bill followed in the Senate on May 21, 2026, introduced by Senator Jim Risch of Idaho and Senator Catherine Cortez Masto of Nevada.
The legislation would require derivatives clearing organizations to approve a geographically diverse network of precious metals depositories across all four continental U.S. time zones. Its purpose is to break the long-standing regional monopoly and allow qualified vaults outside the New York area to participate in the futures delivery system. The bill appeals to several constituencies at once. For mining states, especially in the West, it promises a market structure more aligned with where metals are actually produced. For institutional investors, it offers greater resilience and optionality. For anti-monopoly advocates, it challenges a legacy concentration of market power. For sound money supporters, it reinforces the role of physical metal as a credible alternative to purely financial claims.
The SILVER Act gained additional momentum during an April 16, 2026, House Agriculture Committee oversight hearing featuring testimony from CFTC Chairman Michael S. Selig. The hearing covered broader concerns about the CFTC’s enforcement capacity, staffing, and ability to monitor increasingly complex markets. Lawmakers questioned whether the agency had enough resources to police insider trading, manipulation, prediction markets, and other emerging risks. Representative Andrea Salinas of Oregon pressed Chairman Selig on the agency’s limited enforcement budget and modest staffing requests. Representative Alma Adams of North Carolina later said the hearing raised “serious and unanswered questions” about the CFTC’s direction under Selig’s leadership.
Within that broader context, the precious metals vaulting issue became especially important. If regulators lack the resources to constantly chase manipulation and structural dysfunction after the fact, then proactively reducing known systemic vulnerabilities becomes more attractive. The most significant moment came when Chairman Selig responded to Representative Mark Harris’s questioning about the geographic concentration of silver depositories and H.R. 8007.“We applaud your leadership on this issue, and we’d be happy to work with your office on it,” Selig said.
That statement marked a notable shift. For the first time, a sitting CFTC chairman publicly aligned with congressional efforts to decentralize the precious metals vaulting network. Supporters interpreted the comment as validation of long-standing concerns that the current New York-centered structure creates unnecessary basis risk and market distortion.
Selig also indicated that the CFTC would examine the concentration issue independently, suggesting that regulatory action could move in parallel with legislation.
The SILVER Act has drawn support from a broad coalition across the precious metals supply chain. Backers include independent depositories, private and sovereign mints, bullion dealers, refiners, mining companies, secure logistics providers, insurers, commercial banks, and institutional investors. That breadth of support is unusual. Many of these firms compete fiercely with one another. But the current vaulting restrictions have created a shared grievance: qualified facilities outside the New York corridor are prevented from competing for exchange-approved storage business. Supporters argue that expanding the approved vaulting network would lower costs, improve delivery efficiency, increase competition, and reduce systemic risk.
A more geographically diverse network could also make it easier for metal mined or refined in the western United States to enter deliverable inventory without first being transported across the country to New York-area vaults. That would reduce logistics costs and align the settlement system more closely with domestic production realities.
The SILVER Act also fits into the broader “sound money” movement, gaining traction at the state level. Across the country, state lawmakers and advocates have pushed measures to remove sales taxes on gold and silver, recognize precious metals as legal tender, establish state bullion depositories, and reduce barriers to using physical metal as a savings vehicle.
These efforts reflect growing distrust in the stability of fiat currency, especially in an environment of high debt, inflation anxiety, and geopolitical uncertainty. For sound money advocates, the SILVER Act is a federal counterpart to state-level reforms. It does not merely expand access to vaulting; it strengthens the practical infrastructure required for physical metals to function as credible monetary assets.
The bill also intersects with shifting global tax and tariff dynamics. As countries adjust trade rules, sanctions policies, and monetary reserve strategies, the flow of gold and silver across borders is changing. A more resilient domestic vaulting network would help the United States adapt to that changing landscape by reducing dependence on foreign logistics and a single domestic settlement hub.
If enacted, the SILVER Act could reshape the economics of the U.S. precious metals market in several ways. First, it would introduce competition into a vaulting system long dominated by a small number of approved facilities. More competition could place downward pressure on storage and handling fees. Second, it could improve regional access for miners, refiners, and commercial users. Western mining companies, for example, would no longer be forced to rely on a New York-centered delivery infrastructure that is geographically disconnected from production.
Third, it could increase the amount of metal available for delivery by making it easier and cheaper to place qualifying bullion into approved facilities. Fourth, it could reduce systemic risk. A market dependent on a single region is vulnerable to localized disruptions, including natural disasters, cyberattacks, transportation shutdowns, civil unrest, power failures, and targeted security threats. A distributed network is inherently more resilient. Finally, the reform could improve confidence in futures pricing. If market participants believe physical delivery is more robust and geographically flexible, the paper market’s connection to real metal may strengthen.
The SILVER Act is ultimately about more than vault locations. It raises a deeper question: Can a national commodities market remain resilient when its physical settlement infrastructure is concentrated in one aging geographic model? For decades, the answer was assumed to be yes. New York’s dominance was treated as normal, efficient, and inevitable. But the events of 2026 have challenged that assumption. War, supply chain instability, historic price volatility, foreign central bank gold accumulation, and rising domestic demand for sound money reforms have all exposed the fragility of the current system.
The SILVER Act offers a direct solution: decentralize the vaulting network, approve qualified depositories nationwide, and align the precious metals market’s physical infrastructure with modern financial, industrial, and geopolitical realities. Whether Congress passes the bill quickly or regulators move first, the debate has already shifted. The question is no longer whether the New York-centered vaulting system is old. It is a question of whether the United States can afford to keep relying on it.