Silver Roars Higher as Short Squeeze Rocks the London Market

Core Insights - Silver prices have reached their highest levels in decades due to a historic short squeeze in London, intensifying the global demand for bullion to address supply shortages [1][2] - Spot silver climbed 3.1% to nearly $52 per ounce, while gold surpassed $4,070 per ounce, marking a record-breaking run of eight consecutive weekly gains [2] - The silver market is experiencing significant liquidity issues, with prices nearing the 1980 record of $52.50 per ounce, prompting traders to utilize expensive transport methods to capitalize on price discrepancies [4] Market Dynamics - Silver lease rates surged over 30% on a one-month basis, indicating high borrowing costs for those maintaining short positions, while lease rates for gold and palladium also tightened [5] - The silver market is approximately nine times smaller than gold's, leading to amplified price movements and potential volatility in the absence of central bank support [6] - The four main precious metals have seen price increases between 55% and 80% this year, driven by factors such as central bank buying, rising ETF holdings, and geopolitical tensions [6]