Silver Hits New Record, London Short Squeeze Shakes Global Markets
Silver prices hit an all-time high above $52.50 an ounce on Tuesday, driven by a massive squeeze in the London market that tightened liquidity and sparked a sharp rally in the precious metal. This surge extended silver's sharp rise this year, as demand for safe-haven assets increased amid the global economic downturn.
Spot silver prices briefly rose to $52.59 an ounce, surpassing the previous record set in January 1980 when the billionaire Hunt family attempted to monopolize the market. Traders reported supply shortages in the London trading center, leading some to ship silver bullion via transatlantic cargo flights to meet market demand and take advantage of higher prices in the UK.
Tight market conditions were exacerbated by the cost of borrowing silver in London, which briefly soared to more than 30% on a one-month basis. Meanwhile, strong demand from India also attracted global supply and liquidity in Europe. On the other hand, concerns about potential new US tariffs on critical minerals like silver, platinum, and palladium are adding to the pressure on the metals market.
According to Goldman Sachs analysts, the relatively small silver market—about nine times smaller than gold—makes price movements more extreme. They warn that a sharp correction could occur if investment flows decline.
This year's precious metals rally has also been fueled by expectations of a Fed interest rate cut, a weakening US dollar, and increased central bank demand for gold. Bank of America even raised its silver price target for end-2026 to $65 per ounce, citing a supply deficit and the prospect of longer-term monetary policy easing.
In morning trading in Asia, spot gold also strengthened 0.5% to $4,129.80 per ounce, while platinum and palladium also moved higher amid weakening dollar sentiment. (asd)
Source: Newsmaker.id
