8 hours ago
2
By Jack Ryan and Veena Ali-Khan
October 10, 2025 — 8.42am
Spot silver prices jumped to the highest level in decades as surging demand for safe-haven assets ran into supply constraints in the London bullion market.
The precious metal jumped as much as 4.8 per cent to touch $US51.235 an ounce overnight, the highest since a notorious squeeze orchestrated by the billionaire Hunt brothers in 1980, before paring gains.
Silver’s surge has lifted prices by more than 70 per cent this year, beating gold’s record-breaking rally. It’s part of a growing search for haven assets sparked by fears of fiscal risks in the US, an overheating equities market and threats to the Federal Reserve’s independence.
As the rush to gold continues, silver is having its moment to shine too.Credit: Bloomberg
A shortage of freely available silver in the key London market has added fuel to the gains, while also pushing up the cost of borrowing the metal there to unprecedented levels.
Borrowing costs for silver in the London market rose to the highest in data going back to 2002 on Thursday, hitting 11 per cent. The market had already been showing signs of tightness, after fears that the US could levy tariffs on silver spurred a dash to ship the metal to the New York, drawing down inventories in London and reducing the amount of material available to borrow.
Loading
Part of the reason for the shortage is that much of the silver in London is held in vaults backing exchange-traded funds, and not available to buy or borrow on the market.
Eventually, the premium for silver in London should ease conditions, as traders buy cheaper metal in the US and China, and ship it to the UK to capture higher prices, said Daniel Ghali of TD Securities. Ghali has long held the view that the availability of silver in the London market was critically low.
“This is the culmination of what we dubbed ‘the #silversqueeze you can buy into,‘” he said. “In our view, we see evidence that higher London prices will beget higher London liquidity, which is the anti-thesis for this move higher.”
#silversqueeze
Silver has been boosted this year by the so-called “debasement trade,” with investors flocking to the perceived safety of Bitcoin, gold and silver while pulling away from major currencies. Concerns that the value of financial securities will be eroded by inflation and unsustainable fiscal deficits has led those assets to set new milestones.
The debasement theme “has ignited investors’ enthusiasm towards gold and silver to the point where regression analysis gives way to something more akin to how investors view AI or the technology sector,” said Kieron Hodgson, commodity analyst at Peel Hunt.
The white metal is used around the world as an investment asset, but also has industrial applications including in solar panels and wind turbines, which collectively account for more than half of the silver sold. Demand is set to exceed supply for the fifth consecutive year in 2025.
Silver often moves in tandem with gold, sharing its strong negative correlation with the US dollar and Federal Reserve interest rates. But the metal is also notoriously volatile, and has a cult following among retail investors who view silver prices as being suppressed by large banks and institutions.
Loading
That impassioned following has helped drive sharp rallies in silver in 2011 and 2020, when it surged 140 per cent in less than five months. Over the following year Redditors jumped on board, while #silversqueeze rapidly gained momentum on social media.
In 1980, it was the Hunt brothers, Texan oil billionaires and notorious speculators, whose fear of inflation and belief in the metal as a store of wealth prompted them to try to corner the global market. They stockpiled more than 200 million ounces, driving the price above $US50 an ounce before it crashed below $US11.
That makes silver one of only a small handful of markets whose record highs from the commodity spikes of the 1970s and 1980s have yet to be surpassed. In inflation-adjusted terms, silver’s new high is only worth approximately one quarter of its 1980 peak.
Bloomberg was unable to obtain intraday price data in the London spot market for that period, when the daily price auction settled at a record $US49.450 on January 18, 1980. The all-time-high on Comex was set on the same day, according to a spokesperson for the CME. The record on the Chicago Board of Trade contract, now defunct, was $US52.50.
Bloomberg
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Most Viewed in Business
Loading
