Silver Tops US$52/oz as Historic London Short Squeeze Unfolds

Silver surged to a record above US$52/oz on Oct. 13 as global demand for precious metals intensified a historic short squeeze in London. Spot silver climbed 2.4% to US$52.07/oz, surpassing last week’s high, reaching levels unseen since 1980.

The rally was fueled by dwindling silver inventories in London, creating a premium of about US$1.60/oz over New York prices and prompting traders to move metal across the Atlantic for profit. Silver lease rates jumped over 30% for one-month contracts, raising costs for those maintaining short positions.

Goldman Sachs analysts noted that silver’s smaller, less liquid market amplifies price swings, and without central bank support, even minor investment pullbacks could trigger sharp corrections.

Precious metals overall have climbed sharply this year amid global trade uncertainties, with gains ranging from 55% to 82% for gold, silver, platinum, and palladium. Silver alone has surged nearly 74%, outpacing gold.

The rally has been driven by ongoing US-China trade tensions, threats to Fed independence, and concerns over a potential US government shutdown. Goldman Sachs expects silver to rise further in the medium term, though near-term volatility remains high. Bank of America raised its 2026 price target to US$65/oz, citing supply deficits, fiscal pressures, and lower interest rates. Market nervousness is heightened ahead of the conclusion of the US Section 232 probe on critical minerals, including silver, which could face new levies and further tighten supplies.