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Commodities

SILVER CONTINUES ITS DREAM RUN

ADMIN || 14th October 2025

Silver hit the highest in decades as a historic short squeeze in London intensified, with a fresh surge in prices adding urgency to a worldwide hunt for bullion that could alleviate the mismatch between demand and supply. Spot silver climbed as much as 3.1% to above $52 an ounce. Yet technicals imply its far from hitting a top.

Silver’s rise is outpacing gold this year; it’s gained nearly 80%, versus gold’s 56% gain. Today, the metal has soared above $52 an ounce in London spot markets, a record-wide premium over New York futures. Lease rates, the effective interest charged to borrow physical silver, have climbed beyond 100% annualized, while wafer-thin inventories are forcing traders to fly silver bars across the Atlantic to settle contracts.

Silver’s current z-score of 3.6 shows it’s well above its mean, but still below the 4-sigma extremes reached during last year’s peaks. That pattern signals consolidation at the worst rather than capitulation. Also, free float in the LBMA has fallen to about 200 million ounces, down roughly 75% since 2019.

Benchmark prices in London have soared to near-unprecedented levels over New York, with traders describing a market where liquidity has almost entirely dried up. The squeeze has been driven by a combination of factors, including a wave of investment into silver, a sudden jump in demand from India, and a dwindling supply of available bars to trade.

The London squeeze has become so dramatic that some traders have rushed to book slots in the cargo holds of transatlantic flights for bulky silver bars an expensive mode of transport typically reserved for more valuable gold to profit off the massive premiums in London.

Inventories of silver in London have fallen by a third since mid-2021. However, a large part of that is held by exchange-traded funds. The remaining “free float” of metal available to provide liquidity to the London market mostly held by big banks has dropped to just 200 million ounces, down 75% from a high of over 850 million ounces in mid-2019.

Summary: Near-term prices may cool once new supply reaches London or macro sentiment steadies. That could ease prices back toward the high-40s. But there’s plenty of structural demand for silver whether from solar or electrification, as well as investment flows from funds seeking shelter in precious metals.

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