Spot silver prices have surged to their highest level in decades, driven by strong demand for safe-haven assets and exacerbated by supply constraints in the London bullion market. The precious metal jumped as much as 4.8 per cent to reach $US51.23 an ounce on Thursday (Friday AEDT), marking its highest point since the Hunt brothers’ infamous squeeze in 1980. This rally outperforms even gold’s record-breaking performance this year.
Silver’s price has climbed approximately 75 per cent this year, outpacing the gains seen in gold markets. The upswing is part of a broader trend of investors seeking safe-haven assets, prompted by concerns surrounding fiscal risks in the United States, an overheating equities market, and potential threats to the Federal Reserve’s independence.
A shortage of readily available silver in London is contributing to the price surge, driving up the cost of borrowing the metal significantly. This scarcity in the London market is a key factor behind the current price dynamics.
Notably, silver futures on New York’s Comex are trading below benchmark prices in London, reversing the usual price premium. Despite the rally in the London spot market, futures contracts in New York actually declined on Thursday, highlighting the unusual conditions currently influencing the silver market.
