MUMBAI– Silver prices surged to a historic high above $52.50 an ounce on Tuesday, driven by a powerful short squeeze in London and heightened demand for safe-haven assets amid global economic uncertainty.
Spot silver climbed as much as 0.4 percent to $52.58 an ounce, surpassing the previous record set in January 1980 when the billionaire Hunt brothers attempted to corner the silver market. The rally marks one of the most dramatic moves in precious metals trading in decades.
Gold prices also hit a new all-time high, extending their winning streak to eight consecutive weeks, supported by rising geopolitical tensions and growing expectations of U.S. interest rate cuts.
Traders said the surge in silver was intensified by a severe liquidity crunch in the London market, which has triggered a global rush to acquire physical metal. Prices in London are currently trading at a premium to New York — an unusual occurrence that has prompted traders to transport silver bars across the Atlantic to take advantage of higher prices.
On Tuesday, the London premium stood at around $1.55 an ounce, down from $3 last week but still historically elevated. The squeeze has been compounded by soaring lease rates — the cost of borrowing silver — which jumped above 30 percent for one-month contracts last Friday, making it prohibitively expensive for traders holding short positions.
Strong physical demand from India has further tightened supplies, with recent shipments diverted from London and New York amid concerns over potential U.S. tariffs.
Market analysts said the sharp rise in both gold and silver reflects a broader flight to safety as investors seek protection from volatility in equities, geopolitical tensions, and currency fluctuations.
Gold has rallied nearly 60 percent so far this year, breaching $4,100 an ounce for the first time, fueled by strong central bank buying, expectations of monetary easing, and persistent global instability.
Investors are now awaiting key U.S. economic data — including inflation and retail sales reports — later this week. However, analysts warned that if the federal government shutdown continues, the release of such data, including employment figures, could be delayed. (Source: IANS)
