Silver was one of a handful of markets that had yet to surpass the record highs of the commodity spikes of the 1970s and 1980s.
Silver prices touched an all-time high near $53 an ounce, as a historic short squeeze in London fueled the rally as demand for safe-haven assets surged.
Spot prices in London rose 1% to $52.8983 an ounce, surpassing the peak set in January 1980 on the now-defunct contract monitored by the Chicago Board of Trade – as the billionaire Hunt brothers tried to corner the market. Gold prices also hit another record high, building on eight straight weeks of gains.
Concerns about a liquidity shortage in London have fueled a global search for silver, with benchmark prices rising to near-unprecedented levels near New York. That is prompting some traders to book cargo slots on transatlantic flights for silver bars — an expensive mode of transport usually reserved for gold — to take advantage of higher prices in London. The premium was around $1.15 an ounce in early trading on Tuesday — down from a spread of $3 last week.
Silver lease rates – which represent the annual cost of borrowing the metal on the London market – have remained high this year, but rose more than 30% on a month-on-month basis on Friday. That makes them eye-watering costs for those looking to roll in short positions. A surge in demand from India in recent weeks has reduced the supply of bars available for trading in London, sparking widespread disruptions between the two trading hubs earlier this year amid concerns that the metal could be hit by US tariffs.
Precious metals were officially exempted from tariffs in April, while traders are on edge ahead of the conclusion of the US administration’s so-called Section 232 investigation into critical minerals – which includes silver, as well as platinum and palladium. The investigation has revived fears that the metals could be swept up in new tariffs, adding to market tightness.
The silver market is “less liquid than gold and roughly nine times smaller, which drives up prices,” analysts at Goldman Sachs Group Inc. wrote in a note. “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 remove the tightness in London that has been the cause of the recent rally.”
The rally that has dominated commodity markets has seen the four major precious metals rise between 56% and 81% this year. Gold’s advance has been supported by central-bank purchases, rising holdings in exchange-traded funds and a rate cut by the Federal Reserve. Safe-haven demand has also been helped by renewed US-China trade tensions, threats to the Fed’s independence and the US government shutdown.
“There is no good reason to fight the trends in both gold and silver,” said Singaporean investor Shyam Dewani. “It is clear that the trends have accelerated, and they are likely to continue as the underlying issues of weak governments, weak fiscal positions, confusion over monetary policies all conspire to push both gold and silver higher.”
Bank of America Corp. analysts on Monday raised their end-2026 price target for silver to $65 from $44 an ounce, citing persistent market deficits, an elevated fiscal gap and low interest rates.
Investors were also weighing the outlook for the Fed’s path of monetary easing ahead of the central bank’s next interest-rate decision later this month. Philadelphia Fed President Anna Paulson signaled on Monday that she favors two more quarter-point cuts this year as policymakers look to address the impact of tariffs on consumer price inflation. Then lower borrowing costs to benefit precious metals, which pay no interest.
Spot gold was up 0.7% at $4,140.82 an ounce at 10:04 a.m. in Singapore after rising 2.3% on Monday. The Bloomberg Dollar Spot Index was flat after gaining about 1% last week. Silver rose 0.9%, while platinum and palladium rose.
