Goldman Sachs(US:GS) Sou Hu Cai Jing·2025-10-15 15:22Core Viewpoint - The international silver price has surged to a 45-year high due to a historic "short squeeze," attracting more investors to this relatively niche market, despite warnings from major banks about potential volatility risks [1][3][7]. Group 1: Market Dynamics - The London spot silver inventory has decreased by 75% compared to 2019, leading to a significant increase in leasing rates for silver, which has forced short sellers to transport silver bars from New York to London [3][5]. - Year-to-date, the price of London silver has increased by over 80%, outperforming gold in recent performance [3][4]. - The liquidity in the London silver market is tightening, which has amplified the upward price movement of precious metals [5]. Group 2: Trading Activity - In September, the trading volume of silver futures on the Shanghai Futures Exchange reached 27.51 million contracts, a month-on-month increase of 125.59%, while silver options trading also saw a significant rise [8]. - A specific client was restricted from opening new positions in silver futures due to exceeding self-trading limits, indicating increased regulatory scrutiny in the market [1][8]. Group 3: Risk Assessment - Goldman Sachs has warned that while silver prices may rise in the medium to long term due to potential Fed rate cuts, the short-term volatility and downside risks are greater than those for gold, reflecting the smaller and less liquid nature of the silver market [7]. - Recent market fluctuations have shown vulnerability, with silver futures experiencing over a 6% swing on October 14, highlighting the market's fragility at high price levels [7].