Silver price hits new peak as short squeeze deepens

[Redator]

Silver set a new record above $52 an ounce on Monday, as rising demand for precious metals worldwide deepened a historic short squeeze in the London market.

Spot silver jumped 2.4% to a high of $52.07 per ounce, surpassing last week’s peak, during which it traded at levels last seen in 1980.

Click on chart for live prices.

Behind silver’s rally were concerns over a depleting silver inventory in London, which drove prices to a premium over those seen in New York and prompted traders to ship metals across the Atlantic for a profit. As of Monday, the premium was at about $1.60 an ounce.

Silver lease rates — which represent the annualized cost of borrowing metal in the London market — surged to more than 30% on a one-month basis on Friday, creating eye-watering costs for those looking to roll over short positions.

Historic silver squeeze deepens as prices soar in London market

The silver market “is less liquid and roughly nine times smaller than gold’s, amplifying price moves,” Goldman Sachs Group analysts wrote in a note on Sunday.

“Without a central bank bid to anchor silver prices, even a temporary pullback in investment flows could trigger a disproportionate correction, as it would also unwind the London tightness that drove much of the recent rally.”

Precious metals rally

Precious metals as a whole commodity class have risen sharply this year amid global trade uncertainties that have fueled safe-haven demand. The four main metals (gold, silver, platinum and palladium) have all surged somewhere between 55% and 82% year to date.

For silver, its gains stand at nearly 74%, surpassing that of gold, which has also set a new record.

Gold price notches new record above $4,100

The recent rally has been driven by recurrent US-China trade tensions, threats to the Federal Reserve’s independence and a US government shutdown. These narratives have further boosted the prospects of silver and other precious metals.

Goldman Sachs said that it expects silver prices to rise further in the medium term, driven by private investment flows, but warned of heightened near-term volatility. Bank of America, meanwhile, lifted its end-of-2026 price target significantly from around $44 an ounce to $65, citing persistent market deficits, elevated fiscal gaps and lower interest rates.

Traders remain on edge ahead of the conclusion of the US administration’s so-called Section 232 probe into critical minerals — which includes silver. Fears that the metals could be swept up in new levies have exacerbated market tightness, partly laying the foundations for the squeeze in silver after a major drawdown of freely available supplies in London.

(With files from Bloomberg)

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